-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, H9QK7IUj7/4S5gXY9/h4FMw/q8CyFlQ7q+9UiTfQ0bffpjUJk+Vnv1OSlYITFWSA qBYGoWsAqBGwS0nZL3/maQ== 0000950117-03-005313.txt : 20031217 0000950117-03-005313.hdr.sgml : 20031217 20031216193606 ACCESSION NUMBER: 0000950117-03-005313 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 20031107 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20031217 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HYUNDAI ABS FUNDING CORP CENTRAL INDEX KEY: 0001260125 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] IRS NUMBER: 330978455 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 333-108087 FILM NUMBER: 031058473 BUSINESS ADDRESS: STREET 1: 10550 TALBERT AVENUE CITY: FOUNTAIN VALLEY STATE: CA ZIP: 92708 BUSINESS PHONE: 7145941579 MAIL ADDRESS: STREET 1: 10550 TALBERT AVENUE CITY: FOUNTAIN VALLEY STATE: CA ZIP: 92708 8-K 1 a36678.txt HYUNDAI ABS FUNDING CORP. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------------------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported) November 7, 2003 ---------------- Hyundai ABS Funding Corporation - -------------------------------------------------------------------------------- as Depositor to the Issuer described herein (Exact Name of Registrant as Specified in Charter) Delaware 333-108545 33-0978453 -------- ---------- ---------- (State or Other Jurisdiction of (Commission (I.R.S. Employer Incorporation) File Number) Identification No.) 10550 Talbert Avenue, Fountain Valley, California 92708 ------------------------------------------------- ----- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number including area code (714) 594-1579 Former Name or Former Address, if Changed Since Last Not Applicable Report TABLE OF CONTENTS Item 5. Other Events Item 7. Financial Statements and Exhibits EXHIBIT INDEX SIGNATURES EX-1.1 Underwriting Agreement EX-4.1 Indenture EX-5.1 Legality Opinion EX-8.1 Tax Opinion EX-10.1 Sale and Servicing Agreement EX-10.2 Receivables Purchase Agreement EX-10.3 Administration Agreement EX-23.1 Consent 2 INFORMATION TO BE INCLUDED IN THE REPORT Item 5. Other Events. Hyundai ABS Funding Corporation (the "Registrant") is filing certain exhibits under Item 7 hereof, which relate to the recent public offering of asset-backed notes by Hyundai Auto Receivables Trust 2003-A (the "Issuer"). On November 7, 2003, the Issuer publicly issued $170,000,000 of Class A-1 1.11% Asset Backed Notes due November 15, 2004, $241,000,000 of Class A-2 1.56% Asset Backed Notes due September 15, 2006, $130,000,000 of Class A-3 2.33% Asset Backed Notes due November 15, 2007, $120,618,000 of Class A-4 3.02% Asset Backed Notes due October 15, 2010 (the "Class A Notes"), $39,034,000 of Class B 2.99% Asset Backed Notes due October 15, 2010 (the "Class B Notes"), $11,710,000 of Class C 3.19% Asset Backed Notes due October 15, 2010 (the "Class C Notes") and $40,985,000 of Class D 4.06% Asset Backed Notes due October 15, 2010 (the "Class D Notes" and, together with the Class A Notes, the Class B Notes and the Class C Notes, the "Notes") pursuant to a registration statement (No. 333-108545) declared effective on October 23, 2003. The joint bookrunners for the issuance of the Notes were Banc One Capital Markets, Inc. and Citigroup Global Markets Inc., and the co-managers of the Class A Notes were ABN AMRO Incorporated, Deutsche Bank Securities Inc. and SG Cowen Securities Corporation. The Registrant paid the underwriters a fee of $1,433,413.65 in connection with the sale of the Notes. The net proceeds from the sale of the Notes, which amounted to $751,860,403.72, were used by the Issuer to purchase a pool of motor vehicle retail installment sale contracts that are secured by new and used automobiles and light-duty trucks, which constitute the receivables included in the assets of the Issuer, from the Registrant. The Registrant acquired the receivables from Hyundai Motor Finance Company, a California corporation. The Issuer also used $5,855,027.57 of the net proceeds from the sale of the Notes to fund the Reserve Account. Item 7. Financial Statements and Exhibits. (c) Exhibits Exhibit No. Exhibit ----------- ------- 1.1 Underwriting Agreement, dated as of October 29, 2003, among the Registrant, Hyundai Motor Finance Company ("HMFC") and Banc One Capital Markets, Inc. 4.1 Indenture, dated as of November 7, 2003, between the Issuer and Wells Fargo Bank Minnesota, National Association (the "Indenture Trustee") 5.1 Opinion of Latham & Watkins LLP with respect to legality 8.1 Opinion of Latham & Watkins LLP with respect to United States federal income tax matters 10.1 Sale and Servicing Agreement, dated as of November 7, 2003, among the Issuer, the Registrant, the Indenture Trustee and HMFC 10.2 Receivables Purchase Agreement, dated as of November 7, 2003, between the Registrant and HMFC 3 10.3 Administration Agreement, dated as of November 7, 2003, among the Issuer, the Indenture Trustee and HMFC 23.1 Consent of Latham & Watkins LLP (included in Exhibits 5.1 and 8.1) 4 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: December 16, 2003 HYUNDAI ABS FUNDING CORPORATION By: /s/ David A. Hoeller --------------------------------- Name: David A. Hoeller Title: Vice President & Secretary 5 EXHIBIT INDEX Exhibit No. Exhibit ----------- ------- 1.1 Underwriting Agreement, dated as of October 29, 2003, among the Registrant, Hyundai Motor Finance Company ("HMFC") and Banc One Capital Markets, Inc. 4.1 Indenture, dated as of November 7, 2003, between the Issuer and Wells Fargo Bank Minnesota, National Association (the "Indenture Trustee") 5.1 Opinion of Latham & Watkins LLP with respect to legality 8.1 Opinion of Latham & Watkins LLP with respect to United States federal income tax matters 10.1 Sale and Servicing Agreement, dated as of November 7, 2003, among the Issuer, the Registrant, the Indenture Trustee and HMFC 10.2 Receivables Purchase Agreement, dated as of November 7, 2003, between the Registrant and HMFC 10.3 Administration Agreement, dated as of November 7, 2003, among the Issuer, the Indenture Trustee and HMFC 23.1 Consent of Latham & Watkins LLP (included in Exhibits 5.1 and 8.1) 6 EX-1 3 ex1-1.txt EXHIBIT 1.1 Exhibit 1.1 EXECUTION COPY - -------------------------------------------------------------------------------- HYUNDAI AUTO RECEIVABLES TRUST 2003-A $753,347,000 ASSET BACKED NOTES HYUNDAI ABS FUNDING CORPORATION (DEPOSITOR) HYUNDAI MOTOR FINANCE COMPANY (SELLER AND SERVICER) UNDERWRITING AGREEMENT - -------------------------------------------------------------------------------- October 29, 2003 Banc One Capital Markets, Inc., as Representative of the Several Underwriters 1 Bank One Plaza Mail Suite IL1-0463 Chicago, Illinois 60670 Ladies and Gentlemen: SECTION 1. Introduction. Hyundai ABS Funding Corporation (the "Depositor") proposes to cause Hyundai Auto Receivables Trust 2003-A (the "Trust") to issue and sell $170,000,000 principal amount of its 1.11% Class A-1 Notes (the "Class A-1 Notes"), $241,000,000 principal amount of its 1.56% Class A-2 Notes (the "Class A-2 Notes"), $130,000,000 principal amount of its 2.33% Class A-3 Notes (the "Class A-3 Notes"), and $120,618,000 principal amount of its 3.02% Class A-4 Notes (the "Class A-4 Notes" and together with the Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes, the "Class A Notes"), $39,034,000 principal amount of its 2.99% Class B Notes (the "Class B Notes"), $11,710,000 principal amount of its 3.19% Class C Notes (the "Class C Notes"), and $40,985,000 principal amount of its 4.06% Class D Notes (the "Class D Notes" and together with the Class A Notes, the Class B Notes and the Class C Notes, the "Notes") to the several underwriters set forth on Schedule I (each, an "Underwriter"), for whom you are acting as representative (the "Representative"). The Notes will be issued pursuant to an Indenture, to be dated as of November 7, 2003 (the "Indenture"), between the Trust and Wells Fargo Bank Minnesota, N.A., as indenture trustee (in such capacity, the "Indenture Trustee"). The assets of the Trust will include, among other things, a pool of motor vehicle retail installment sale contracts acquired by Hyundai Motor Finance Company ("HMFC") and sold to the Trust on the Closing Date (the "Receivables") secured by new and used automobiles and light-duty trucks and financed thereby (the "Vehicles"), certain monies received thereunder after the close of business on September 30, 2003 (the "Cutoff Date"), and the other property and the proceeds thereof to be conveyed to the Trust pursuant to the Sale and Servicing Agreement to be dated as of November 7, 2003 (the "Sale and Servicing Agreement") among the Trust, HMFC, as servicer, the Depositor and the Indenture Trustee. Pursuant to the Sale and Servicing Agreement, the Depositor will sell the Receivables to the Trust and HMFC will service the Receivables on behalf of the Trust. In addition, pursuant to the Owner Trust Administration Agreement to be dated as of November 7, 2003 (the "Administration Agreement") among the Trust, HMFC, and the Indenture Trustee, HMFC will agree to perform certain administrative tasks on behalf of the Trust. The Depositor formed the Trust pursuant to a trust agreement, and it will be governed by an Amended and Restated Trust Agreement (the "Trust Agreement") to be dated as of November 7, 2003 between the Depositor and Wilmington Trust Company, as owner trustee (the "Owner Trustee"). The owner trust certificate (the "Certificate"), representing a fractional undivided interest in the Trust, will be issued to the Depositor pursuant to the Trust Agreement. -2- The Depositor will acquire the Receivables from HMFC pursuant to the terms of the Receivables Purchase Agreement (the "Receivables Purchase Agreement") to be dated as of November 7, 2003 between the Depositor and HMFC. HMFC has acquired the Receivables from franchised dealers (the "Hyundai Dealers") pursuant to certain dealer retail agreements between each Hyundai Dealer and HMFC (collectively, the "Dealer Retail Agreements"). Capitalized terms used but not otherwise defined in this Underwriting Agreement (this "Agreement") shall have the meanings set forth in the Sale and Servicing Agreement or if not defined therein, then as defined in the Prospectus Supplement (as defined below). As used herein, the term "Transaction Documents" refers to the Sale and Servicing Agreement, Indenture, Trust Agreement, Receivables Purchase Agreement and Administration Agreement. SECTION 2. Representations and Warranties. (a) As a condition of the several obligations of the Underwriters to purchase the Notes, each of the Depositor and HMFC makes the representations and warranties set forth below to the Representative and each of the Underwriters. To the extent a representation or warranty specifically relates to the Depositor, such representation or warranty is made by the Depositor and HMFC jointly, and to the extent a representation or warranty specifically relates solely to HMFC, such representation or warranty is only made by HMFC and not by the Depositor. (i) The registration statement on Form S-3 (No. 333-108545), including the exhibits thereto, has been filed with the Securities and Exchange Commission (the "Commission") for registration under the Securities Act of 1933, as amended (the "Securities Act"), which registration statement has been declared effective by the Commission. Such registration statement, including the exhibits thereto, as amended to the date hereof, is hereinafter called the "Registration Statement"; the prospectus included in the Registration Statement, at the time the Registration Statement became effective, or as subsequently filed with the Commission pursuant to Rule 424(b) under the Securities Act is hereinafter called the "Base Prospectus"; a prospectus supplement relating to the Notes, in the form first filed after the date hereof pursuant to Rule 424(b) under the Securities Act, including the Base Prospectus as so supplemented is hereinafter called the "Prospectus Supplement"; and the Base Prospectus together with the Prospectus Supplement are hereinafter called the "Prospectus." Any preliminary form of the Prospectus that has heretofore been filed pursuant to Rule 424(b) is hereinafter called a "Preliminary Prospectus." Any reference herein to the terms "amend," "amendment" or "supplement" with respect to the Registration Statement, the Base Prospectus or the Prospectus Supplement, shall be deemed to refer to and include the filing of any document under the Securities Exchange Act of 1934, as amended (the "Exchange Act") after the Effective Date or the issue date of the Base Prospectus or Prospectus Supplement, as the case may be, deemed to be incorporated therein by reference pursuant to Item 12 of Form S-3 under the Securities Act. (ii) The Registration Statement as of the effective date thereof (the "Effective Date"), and the Prospectus, as of the date of the Prospectus Supplement, complied in all material respects to the applicable requirements of the Securities Act and the rules and regulations of the Commission thereunder (the "Rules and Regulations"); -3- and the information in the Registration Statement, as of the Effective Date, will conform in all material respects to the requirements of the Securities Act and the Rules and Regulations and did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and the Prospectus, and any amendments thereof and supplements thereto, as of the date of the Prospectus Supplement and as of the Closing Date, will conform in all material respects to the requirements of the Securities Act and the Rules and Regulations and will not include any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they are made, not misleading; provided, however, that neither HMFC nor the Depositor makes any representations or warranties as to the information contained in or omitted from such Registration Statement or such Prospectus (or any supplement thereto) in reliance upon and in conformity with written information furnished to HMFC by or on behalf of the Underwriters specifically for use in the preparation thereof which information consists of the information set forth in the chart following the first paragraph, the second paragraph, the selling concession and reallowance chart at the end of the second paragraph, the third paragraph and the fourth paragraph under the heading "Underwriting" in the Prospectus Supplement (the "Underwriters' Information"). (iii) Since the respective dates as of which information is given in the Prospectus there has not been any material adverse change, or, to the best of our knowledge, any development involving a prospective material adverse change, in or affecting the condition, financial or otherwise, earnings, business or operations of any of HMFC or its subsidiaries, including the Depositor and its subsidiaries, taken as a whole, except as disclosed to the Representative in writing prior to the date hereof. (iv) The Indenture has been qualified under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). (v) The Trust Agreement is not required to be qualified under the Trust Indenture Act. (vi) The Trust is not required to register under the Investment Company Act of 1940, as amended (the "Investment Company Act"). (vii) The issuance and sale of the Notes have been duly authorized by all necessary corporate action of the Depositor and, when executed, authenticated and delivered to and paid for by the Underwriters in accordance with the terms of this Agreement and the Indenture, the Notes will be valid and binding obligations of the Trust, enforceable in accordance with their terms, and entitled to the benefits of the Indenture. (viii) Each of the Depositor and HMFC has been duly incorporated and is validly existing as a corporation in good standing under the law of its jurisdiction of incorporation with full power and authority to own, lease and operate its properties and assets and conduct its business as described in the Prospectus, is duly qualified to transact -4- business and is in good standing in each jurisdiction in which its ownership, leasing or operation of its properties or assets or the conduct of its business requires such qualification, and has full power and authority to execute and perform its obligations under this Agreement and the Transaction Documents to which it is a party. (ix) The execution and delivery of this Agreement have been duly authorized by all necessary corporate action of the Depositor and HMFC, and this Agreement has been duly executed and delivered by the Depositor and HMFC and when duly executed and delivered by the other parties hereto will be the legal, valid and binding agreement of the Depositor and HMFC, enforceable against the Depositor and HMFC in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights, and subject to general equity principles. (x) The execution and delivery of the Transaction Documents to which it is a party have been duly authorized by all necessary corporate action of the Depositor or HMFC, as applicable, and, when duly executed and delivered by the Depositor, HMFC and the other parties thereto, will be legal, valid and binding agreements of the Depositor and HMFC, enforceable against the Depositor or HMFC in accordance with their respective terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights, and subject to general equity principles. (xi) The execution and delivery by each of the Depositor and HMFC of, and the performance by each of the Depositor and HMFC of its obligations under, this Agreement, each of the Transaction Documents to which it is a party and the Depositor under the Notes, the issuance and sale of the Notes to the Underwriters by the Depositor pursuant to this Agreement, the compliance by the Depositor and HMFC with the other provisions of this Agreement and the consummation of the other transactions herein contemplated do not (x) require the consent, approval, authorization, registration or qualification of or with any governmental authority, except such as have been obtained or made, or (y) conflict with or result in a breach or violation or acceleration of, or constitute a default under, any term or provision of the organizational documents of the Depositor or HMFC, any indenture mortgage, deed of trust, lease or other agreement or instrument to which the Depositor or HMFC is a party or by which any of them or their properties is bound or result in a violation of or contravene the terms of any statute, order or regulation applicable to the Depositor or HMFC of any court, regulatory body, administrative agency, governmental body or arbitrator having jurisdiction over the Depositor or HMFC, or result in the creation of any lien upon any property or assets of the Depositor or HMFC (other than pursuant to the Transaction Documents). (xii) None of the Depositor or HMFC is in violation of any term or provision of its charter documents or by-laws, or in breach of or in default under any statute or any judgment, decree, order, rule or regulation of any court or other governmental authority or any arbitrator applicable to the Depositor or HMFC, the consequence of which violation, breach or default would have (a) a materially adverse effect on or constitute a -5- materially adverse change in the condition (financial or otherwise), earnings, properties, business affairs, net worth or results of operations of the Depositor or HMFC or (b) a material and adverse effect on its ability to perform its obligations under this Agreement or any of the Transaction Documents, in each case, to which it is a party. (xiii) None of the Depositor, HMFC nor anyone acting on their behalf has taken any action that would require registration of the Depositor or the Trust under the Investment Company Act; nor will the Depositor nor HMFC act, nor has either of them authorized nor will either of them authorize any person to act, in such manner. (xiv) The Depositor and HMFC each possess all consents, licenses, certificates, authorizations and permits issued by the appropriate federal, state or foreign regulatory authorities necessary to conduct their respective businesses, and none of the Depositor or HMFC has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a materially adverse effect on or constitute a materially adverse change in the condition (financial or otherwise), earnings, properties, business affairs, net worth or results of operations of the Depositor or HMFC, except as described in or contemplated by the Prospectus. (xv) No legal or governmental proceedings are pending or threatened to which the Depositor or HMFC is a party or to which the property of the Depositor or HMFC is subject except for such proceedings that would not, if the subject of any unfavorable decision, ruling or finding, singly or in the aggregate, have a material adverse effect on the condition (financial or otherwise), earnings, properties, business affairs, net worth or results of operations of the Depositor or HMFC or the Depositor's or HMFC's ability to perform its obligations under this Agreement, the Transaction Documents to which it is a party or the Notes. (xvi) No default exists, and no event has occurred which, with notice or lapse of time or both, would constitute a default in the due performance and observance of any term, covenant or condition of any indenture, mortgage, deed of trust, lease or other agreement or instrument to which the Depositor or HMFC is a party or by which the Depositor or HMFC or any of its respective properties is bound. (xvii) The Notes and the Transaction Documents conform in all material respects to the descriptions thereof contained in the Prospectus. (xviii) Each of the Depositor's and HMFC's representations and warranties in the Transaction Documents are true and correct as of the date they are given therein and will be true and correct on the Closing Date, and such representations and warranties are incorporated herein by reference. (xix) Other than as contemplated by this Agreement or as disclosed in the Prospectus, there is no broker, finder or other party that is entitled to receive from the -6- Depositor or any of its Affiliate or the Underwriters, any brokerage or finder's fee or other fee or commission as a result of any of the transactions contemplated by this Agreement. (xx) None of the Depositor, HMFC nor any of their Affiliates has entered into, nor will it enter into, any contractual arrangement with respect to the distribution of the Notes except for this Agreement. (xxi) Assuming that the Notes are issued in accordance with the provisions of the Indenture and distributed in accordance with the terms of the Agreement and as described in the Prospectus, the Notes are "asset backed securities" within the meaning of, and satisfy the requirements for use of, Form S-3 under the Securities Act. (xxii) The Notes, when duly and validly executed by the Indenture Trustee, authenticated and delivered in accordance with the Indenture, and delivered and paid for pursuant hereto will be validly issued and outstanding and entitled to the benefits of the Indenture. (xxiii) The Certificates, when duly and validly executed by the Owner Trustee, authenticated and delivered in accordance with the Trust Agreement, will be validly issued and outstanding and entitled to the benefits of the Trust Agreement. (xxiv) Any taxes, fees and other governmental charges due on or prior to the Closing Date (including, without limitation, sales taxes) in connection with the execution, delivery and performance of this Agreement and the Transaction Documents and the issuance of the Notes have been or will have been paid at or prior to the Closing Date. (xxv) Under generally accepted accounting principles, HMFC will report its transfer of the Receivables to the Depositor as a sale of the Receivables, and the Depositor will report its transfer of the Receivables to the Trust as a sale of the Receivables. (xxvi) None of the transactions contemplated by this Agreement (including, without limitation, the use of the proceeds from the sale of the Notes) will violate or result in a violation of Section 7 of the Exchange Act, or any regulation promulgated thereunder, including, without limitation, Regulations T, U, and X of the Board of Governors of the Federal Reserve System. (xxvii) Prior to the date hereof, none of HMFC, the Depositor nor any of their Affiliates (including, without limitation, all officers and directors thereof) has taken any action which is designed to or which has constituted or which might have been expected to cause or result in stabilization or manipulation of the price of any security in connection with the offering of the Notes. (b) The above representations and warranties shall be deemed to be repeated in their entirety at and as of the Closing Date. -7- SECTION 3. Purchase, Sale and Delivery of Notes. (a) On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein set forth, the Depositor agrees to cause the Trust to sell to each Underwriter, and each Underwriter agrees, severally and not jointly, to purchase from the Trust the respective principal amount of the Notes set forth opposite the name of such Underwriter on Schedule I, at a purchase price (the "Purchase Price") equal to "Price $" as specified on Schedule II hereto. Delivery of and payment for the Notes shall be made at the offices of Latham & Watkins, 885 Third Avenue, Suite 1000, New York, New York 10022 at 10:00 a.m. (New York time) on November 7, 2003 (or at such other place and time on the same or other date as shall be agreed to in writing by the Representative and the Depositor, the "Closing Date"). Delivery of one or more global notes representing the Notes shall be made against payment of the aggregate purchase price in immediately available funds drawn to the order of the Depositor. The global notes to be so delivered shall be registered in the name of Cede & Co., as nominee of The Depository Trust Company ("DTC"). The interests of beneficial owners of the Notes will be represented by book entries on the records of DTC and participating members thereof. Definitive Notes representing the Notes will be available only under limited circumstances. (b) The Depositor hereby acknowledges that the payment of monies pursuant to Section 3(a) hereof (a "Payment") by or on behalf of the Underwriters of the aggregate Purchase Price for the Notes does not constitute closing of a purchase and sale of the Notes. Only (1) the execution and delivery, by facsimile or otherwise, of a receipt for Notes by the Representative, and (2) the release of all Permitted Liens, as listed on Schedule IV hereto, by 4:00 p.m. (New York time) on the Closing Date, indicates completion of the closing of a purchase of the Notes from the Depositor. Furthermore, in the event that the Underwriters make a Payment to the Depositor prior to the completion of the closing of a purchase of Notes, the Depositor hereby acknowledges that until the Representative executes and delivers such receipt for the Notes and until all Permitted Liens have been released by or before 4:00 p.m. (New York time) on the Closing Date, the Depositor will not be entitled to the Payment and shall return the Payment to the Underwriters as soon as practicable (by wire transfer of same-day funds) upon demand. In the event that the closing of a purchase of Notes is not completed and the Payment is not returned by the Depositor to the Underwriters on the same day the Payment was received by the Depositor, the Depositor agrees to pay to the Underwriters in respect of each day the Payment is not returned by it, in same-day funds, interest on the amount of such Payment in an amount representing the Underwriters' cost of financing as reasonably determined by the Representative. (c) It is understood that the Representative or any Underwriter, individually, may (but shall not be obligated to) make Payment on behalf of any Underwriter or Underwriters for any of the Notes to be purchased by such Underwriter or Underwriters. No such Payment shall relieve such Underwriter or Underwriters from any of its or their obligations hereunder. SECTION 4. Offering by Underwriters. Upon the authorization by the Representative of the release of the Notes, the several Underwriters propose to offer the Notes for sale upon the terms and conditions set forth in this Agreement and the Prospectus. SECTION 5. Covenants of the Depositor and HMFC. The Depositor and HMFC each covenant and agree with the Underwriters as set forth below. -8- (a) To file the Prospectus, properly completed, with the Commission pursuant to and in accordance with Rule 424(b) no later than the second business day following the day it is first used. The Company will advise the Representative promptly of any such filing pursuant to Rule 424(b). (b) To furnish to the Underwriters and counsel for the Underwriters, without charge, as many copies of the Registration Statement, Preliminary Prospectus and the Prospectus and all amendments and supplements to such documents, in each case as soon as available and in such quantities as the Underwriters reasonably request. The Prospectus shall be furnished on or prior to 3:00 P.M., New York time, on or prior to the third business day preceding the Closing Date. All other documents shall be so furnished as soon as available and in such quantities as the Representative may reasonably request. The Depositor or HMFC will pay the expenses of printing, reproducing and distributing to the Underwriters all such documents. (c) To advise the Representative promptly, in writing, of any proposal to amend or supplement the Registration Statement or the Prospectus and will not effect any such amendment or supplement to which the Representative shall reasonably object; and to also advise the Representative promptly of the effectiveness of each Registration Statement and of any amendment or supplement of the Registration Statement or the Prospectus and of the institution by the Commission of any stop order proceedings in respect of the Registration Statement and will use its best efforts to prevent the issuance of any such stop order and to obtain as soon as possible its lifting, if issued. (d) To furnish the Underwriters with copies of the Preliminary Prospectus and the Prospectus and each amendment or supplement, during the period when any Underwriter is required to deliver a Prospectus under the Securities Act, at the cost and expense of the Depositor, each in such quantities as the Representative may from time to time reasonably request (and subsequent to such period, to assist the Underwriters in obtaining sufficient additional copies of the Prospectus, at the cost and expense of the Underwriters requesting such additional copies); and if, at any time prior to the expiration of the Prospectus delivery period under the Securities Act, any event shall have occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus is delivered, not misleading, or, if for any other reason it shall be necessary or desirable during such same period to amend or supplement the Prospectus, to notify the Representative and promptly prepare and file with the Commission (subject to the Representative's prior review pursuant to Section 5(c)), at its own expense, an amendment or supplement which will correct such statement or omission, or an amendment which will effect such compliance. Upon the Representative's request, the Depositor will prepare and furnish without charge to each Underwriter and to any dealer in securities as many written and electronic copies as the Representative may from time to time reasonably request of an amended Prospectus or a supplement to the Prospectus which will correct such statement or omission or effect such compliance. Neither the Underwriters' consent to, nor the Underwriters' distribution of any amendment or supplement to the Prospectus shall constitute a waiver of any of the conditions set forth in Section 7 hereof. -9- (e) The Depositor will arrange for the qualification of the Notes for offering and sale in each jurisdiction as the Representative shall designate including, but not limited to, pursuant to applicable state securities ("Blue Sky") laws of certain states of the United States of America or other U. S. jurisdictions so designated, and the Depositor shall maintain such qualifications in effect for so long as may be necessary in order to complete the placement of the Notes; provided, however, that the Depositor shall not be obliged to file any general consent to service of process or to qualify as a foreign corporation or as a securities dealer in any jurisdiction or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject. The Depositor will promptly advise the Representative of the receipt by the Depositor of any notification with respect to the suspension of the qualification of the Notes for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose. (f) The Depositor will cooperate with the Representative and use its best efforts to permit the Notes to be eligible for clearance and settlement through DTC. (g) HMFC and the Depositor shall (i) furnish or make available to the Underwriters or their counsel such additional documents and information regarding HMFC, the Depositor and their respective affairs as the Underwriters may from time to time reasonably request prior to the Closing Date, including any and all documentation reasonably requested in connection with its due diligence efforts regarding information in the Registration Statement and the Prospectus and in order to evidence the accuracy or completeness of any of the conditions contained in this Agreement, (ii) provide the Underwriters or their advisors, or both, prior to acceptance of its subscription, the opportunity to ask questions of, and receive answers with respect to such matters. (h) From the date hereof until the Closing Date, none of the Depositor, HMFC, nor any of their respective Affiliates will, without the prior written consent of the Representative, directly or indirectly, offer, sell or contract to sell or announce the offering of, in a public or private transaction, any other collateralized securities similar to the Notes. (i) During the period beginning on the Closing Date and continuing until and including the date that is six months after the Closing Date, none of the Depositor, HMFC or any of their Affiliates shall offer, sell, contract to sell or otherwise dispose of any securities of the Trust, the Depositor or HMFC in a public offering that are substantially similar to the Notes, without first furnishing to the Representative an opinion of counsel (in form and from such firm as is reasonably satisfactory to the Representative and counsel to the Representative) stating that such public offering of securities would not result in any violation of federal or state securities laws with respect to the Notes. (j) Until the retirement of the Notes, neither the Depositor nor HMFC shall, nor cause the Trust to, be or become an open-end investment company, unit investment trust, closed-end investment company or face-amount certificate company that is or is required to be registered under Section 8 of the Investment Company Act. (k) Until the retirement of the Notes, or until none of the Underwriters maintains a secondary market in the Notes, whichever occurs first, HMFC shall cause the Depositor to and -10- the Depositor shall deliver to each of the Underwriters, through the Representative, the annual statement of compliance and any annual independent certified public accountants' report furnished to the Indenture Trustee pursuant to the Sale and Servicing Agreement, as soon as such statements and reports are furnished to the Indenture Trustee. (l) So long as any of the Notes are outstanding, HMFC shall cause the Depositor to and the Depositor shall deliver to each of the Underwriters, through the Representative: (i) all documents distributed to Noteholders and (ii) from time to time, any other information concerning HMFC, the Depositor or the Trust as the Underwriters may reasonably request only insofar as such information reasonably relates to the Registration Statement, the Prospectus or the transactions contemplated by the Transaction Documents. (m) On or before the Closing Date, HMFC and the Depositor (to the extent applicable) shall each cause their computer records relating to the Receivables to be marked to show the Trust's absolute ownership of the Receivables, and from and after the Closing Date neither the Depositor nor HMFC shall take any action inconsistent with the Trust's ownership of such Receivables, other than as permitted by the Indenture or Sale and Servicing Agreement. (n) To the extent, if any, that any of the ratings assigned to the Notes by any of the rating agencies that initially rate the Notes are conditional upon the furnishing of documents or the taking of any other actions by the Depositor or HMFC, as the case may be, the relevant party shall furnish, or cause to be furnished, such documents and take any such other actions as promptly as possible. (o) The Depositor or HMFC will cause the Trust to make generally available to Noteholders, as soon as practicable, but no later than sixteen months after the date hereof, an earnings statement of the Trust covering a period of at least twelve consecutive months beginning after the later of (i) the Effective Date of the Registration Statement relating to the Notes and (ii) the effective date of the most recent post-effective amendment to the Registration Statement to become effective prior to the date of this Agreement. SECTION 6. Payment of Expenses. HMFC will pay all expenses incident to the transactions contemplated by this Agreement, whether or not the transactions contemplated herein are consummated or this Agreement is terminated pursuant to Section 8 hereof, including: (a) the preparation, printing and distribution of the Registration Statement, the Preliminary Prospectus and the Prospectus Supplement and each amendment or supplement thereto and delivery of copies thereof to the Underwriters, (b) the preparation of this Agreement, (c) the preparation, issuance and delivery of the Notes to the Underwriters (or any appointed clearing organizations), (d) the fees and disbursements of HMFC's and the Depositor's accountants, (e) the qualification of the Notes under state securities laws including filing fees and the fees and disbursements of counsel to the Underwriters in connection therewith and in connection with the preparation of any Blue Sky survey (including the printing and delivery thereof to the Underwriters), (f) any fees charged by rating agencies for the rating (or consideration of the rating) of the Notes, (g) the fees and expenses incurred with respect to any filing with, and review by, DTC or any similar organizations, (h) the fees and disbursements of the Indenture Trustee and its counsel, if any, (i) the fees and disbursements of the Owner Trustee and its -11- counsel, if any, (j) the fees and expenses of Richards Layton & Finger, Delaware counsel to the Trust, and (k) the reasonable fees and expenses of HMFC's and the Depositor's counsel. Notwithstanding clause (k) above, to the extent that the transactions contemplated by this Agreement are consummated, HMFC shall only pay the fees and expenses described in clause (k) to the extent that such fees and expenses exceed $150,000 and the Underwriters shall pay such fees and expenses in an aggregate amount of up to $150,000. In addition, if for any reason the purchase of the Notes by the Underwriters is not consummated (other than pursuant to Section 10 hereof), HMFC will reimburse the Representative and the Underwriters for all out-of-pocket expenses (including reasonable fees and disbursements of counsel to the Representative and the Underwriters) incurred by them in connection with the offering of the Notes. SECTION 7. Conditions of the Obligations of the Underwriters. The several obligations of the Underwriters to purchase and pay for the Notes will be subject to the accuracy of the representations and warranties made herein, to the accuracy of the statements of officers made pursuant hereto, to the performance by the Depositor and HMFC of their obligations hereunder, and to the following additional conditions precedent: (a) On the Closing Date, each of the Transaction Documents, the Notes and the Certificates shall have been duly authorized, executed and delivered by the parties thereto, shall be in full force and effect and no default shall exist thereunder, and the Owner Trustee and the Indenture Trustee shall have received a fully executed copy thereof or, with respect to the Notes and Certificates, a conformed copy thereof. The Transaction Documents, the Notes and the Certificates shall be substantially in the forms heretofore provided to the Representative. (b) Both at or before the date hereof, and on or before the Closing Date, the Representative shall have received letters, dated as of the date hereof and as of the Closing Date, respectively, of KPMG LLP, independent certified public accountants, substantially in the form of the drafts to which the Representative has agreed previously and otherwise substantially in form and substance reasonably satisfactory to the Representative and counsel to the Underwriters. (c) The Prospectus shall have been filed with the Commission in accordance with Rule 424(b) of the Securities Act and Section 5(a) hereof. (d) (i) None of the Depositor, HMFC nor any of their subsidiaries shall have sustained, since the date of the latest audited financial statements provided to the Representative, any material loss or interference with its respective business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Registration Statement or the Prospectus, and (ii) since the respective dates as of which information is given in the Registration Statement and the Prospectus there shall not have been any change, or any development involving a prospective change, in or affecting the general affairs, management, financial position, or results of operations of the Depositor, HMFC, and their respective subsidiaries, otherwise than as set forth or contemplated in the Registration Statement and the Prospectus, the effect of which, in any such case described in clause (i) or (ii), in the judgment of the Representative, makes it impracticable or inadvisable to proceed with the -12- offering or the delivery of the Notes on the terms and in the manner contemplated in this Agreement and in the Prospectus. (e) The Representative shall have received an opinion of in-house counsel to the Depositor and HMFC, addressed to the Representative, dated the Closing Date and satisfactory in form and substance to the Representative and counsel to the Underwriters, to the effect that: (i) Each of HMFC and the Depositor has been duly formed and is validly existing as a corporation in good standing under the laws of the jurisdiction of its formation, and has the power and authority to own its properties and to conduct its business as presently conducted, and to enter into and perform its obligations under this Agreement and the Transaction Documents to which each is a party, and had at all relevant times, and now has, the power and authority to acquire, own, sell and service the Receivables and the related Collateral. (ii) Each of this Agreement and each Transaction Document has been duly authorized, executed and delivered by the Depositor and HMFC, as applicable. (iii) Each of the Depositor and HMFC is duly qualified to do business and is in good standing, and has obtained all necessary licenses, in each jurisdiction in which failure to so qualify or obtain such licenses would (a) render any Receivable unenforceable by the Depositor or the Indenture Trustee on behalf of any Noteholder or (b) have a material adverse affect upon its business or the ownership of its property. (iv) Neither: (A) the transfer of the Receivables from HMFC to the Depositor pursuant to the Receivables Purchase Agreement, (B) the transfer of the Receivables from the Depositor to the Trust pursuant to the Sale and Servicing Agreement, (C) the assignment of the Collateral from HMFC to the Depositor and thereafter to the Trust, (D) the assignment of its rights under the Receivables Purchase Agreement by the Depositor to the Trust, (E) the grant of the security interest in the Receivables and the Collateral by the Trust to the Indenture Trustee pursuant to the Indenture, (F) the execution and delivery of this Agreement and the Transaction Documents to which it is a party by HMFC, (G) the execution and delivery of this Agreement, the Transaction Documents to which it is a party and the Notes by the Depositor, (H) the consummation of any transactions contemplated in this Agreement or the Transaction Documents, nor (I) the fulfillment of the terms of this Agreement, the Transaction Documents or the Notes by HMFC or the Depositor, as the case may be, will (1) conflict with, or result in a breach, violation or acceleration of, or constitute a default under, any term or provision of the articles of incorporation or by-laws of HMFC or the Depositor, or of any indenture or other agreement or instrument to which either of them is a party or by which any of them or their respective property is bound, or (2) result in a violation, or contravene the terms, of any statute, order or regulation applicable to either of them of any court, regulatory body, administrative agency or governmental body having jurisdiction over HMFC or the Depositor, in each case that would materially and adversely affect the performance by the Depositor or HMFC of its obligations under this Agreement or the Transaction Documents to which it is a party. -13- (v) There are no actions, proceedings or investigations pending or, to the best of such counsel's knowledge after due inquiry, threatened before any court, administrative agency or other tribunal: (A) asserting the invalidity or unenforceability of this Agreement or the Transaction Documents, (B) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or the Transaction Documents, or the execution and delivery thereof, (C) that could reasonably be expected to materially and adversely affect the performance by the Depositor of its obligations under this Agreement or the Transaction Documents, (D) that could reasonably be expected to materially and adversely affect the performance by HMFC of its obligations under this Agreement or the Transaction Documents to which it is a party. (vi) Such counsel is familiar with HMFC's standard operating procedures relating to its acquisition of a perfected first priority security interest in the vehicles financed by it pursuant to retail installment sale contracts in the ordinary course of its business. Assuming that its standard procedures are followed with respect to the perfection of security interests in the Vehicles (and such counsel has no reason to believe that HMFC has not followed its standard procedures in all material respects in connection with the perfection of security interests in the Vehicles), HMFC has acquired or will acquire a perfected first priority security interest in the Vehicles. Neither such security interest nor the perfection of such security interest shall be adversely affected by the transfer of the Receivables to the Depositor, the Trust or the pledge thereof to the Indenture Trustee. (vii) The direction by the Trust to the Indenture Trustee to authenticate the Notes has been duly authorized by HMFC, acting as the administrator of the Trust under the Administration Agreement. (viii) The Receivables are "chattel paper" as defined in the Uniform Commercial Code as in effect in California. (ix) Neither the Depositor nor HMFC is an "investment company" as such term is defined in the Investment Company Act, and neither the Depositor nor HMFC will become an "investment company" as a result of the consummation of the transaction as contemplated herein Such opinion may contain such assumptions, qualifications and limitations as are usual and customary in opinions of this type and are reasonably acceptable to counsel to the Underwriters. In rendering such opinion, such counsel may state that they express no opinion as to the laws of any jurisdiction other than the federal law of the United States of America, the corporate laws of the State of Delaware and the laws of the State of California. (f) The Representative shall have received an opinion of Latham & Watkins, counsel to the Depositor, HMFC and the Trust, addressed to the Representative, dated the Closing Date and satisfactory in form and substance to the Representative and counsel to the Underwriters, to the effect that: -14- (i) This Agreement, and each Transaction Document to which the Depositor, the Trust and HMFC (each a "Company") is a party constitutes a legally valid and binding obligation of such Company, enforceable against such Company in accordance with its terms. (ii) The Notes, when duly executed and delivered by the Owner Trustee on behalf of the Trust, authenticated by the Indenture Trustee and delivered and paid for pursuant to this Agreement, will constitute legally valid and binding obligations of the Trust, enforceable against the Trust in accordance with their terms. (iii) The execution and delivery of this Agreement and the Transaction Documents by each Company a party thereto, and the consummation by such Company of the transactions contemplated by this Agreement and the Transaction Documents to which it is a party on the date hereof do not (i) violate the provisions of the agreements described in an exhibit to such opinion (such agreements, the "Conduit Documents"), (ii) violate any federal or New York statute, rule, or regulation applicable to such Company, or (iii) require any consents, approvals, authorizations, registrations, declarations or filings by such Company under any federal or New York statute, rule, or regulation applicable to such Company except filings and recordings required in order to perfect or otherwise protect the security interests under the Transaction Documents. (iv) The Receivables Purchase Agreement is effective to create a valid security interest, as such term is defined in the UCC as in effect in the State of New York (the "New York UCC"), in favor of the Depositor in that portion of the collateral, in which HMFC has rights, as described in Section 2.01(c) of the Receivables Purchase Agreement and the transfer of which pursuant to Section 2.01(c) of the Receivables Purchase Agreement is subject to Article 9 of the New York UCC (the "RPA Assets"). (v) The Sale and Servicing Agreement is effective to create a valid security interest, as such term is defined in the New York UCC, in favor of the Trust in that portion of the collateral, in which the Depositor has rights, as described in Section 2.01 of the Sale and Servicing Agreement and the transfer of which pursuant to Section 2.01 of the Sale and Servicing Agreement, is subject to Article 9 of the New York UCC (the "SSA Assets"). (vi) The Indenture is effective to create a valid security interest, as such term is defined in the New York UCC, in favor of the Indenture Trustee in the Granting Clause of the Indenture in which the Trust has rights which is subject to Article 9 of the New York UCC (the "Indenture Assets" and, together with the RPA Assets and the SSA Assets, the "Transferred Assets"). (vii) The HMFC Financing Statement is in appropriate form for filing in the California filing office specified in such opinion (the "California Filing Office"). Insofar as Division 9 of the UCC as in effect in the State of California (the "California UCC") is applicable (without regard to conflicts of law principles), upon the proper filing of the release statements in the applicable filing offices specified in such opinion and the -15- HMFC Financing Statement in the California Filing Office, the security interest in favor of the Depositor in the RPA Assets described in the HMFC Financing Statement will be perfected in that portion of such RPA Assets that can be perfected under the California UCC by the filing of a financing statement with the California Filing Office (the "Division 9 Filing RPA Assets"). (viii) The HMFC search reports (as described in such opinion) identify no secured party who has filed a financing statement naming HMFC as debtor and describing the Division 9 Filing RPA Assets, other than in connection with the Permitted Liens. (ix) The Depositor Financing Statement is in appropriate form for filing in the Delaware filing office specified in such opinion (the "Delaware Filing Office"). Insofar as Article 9 of the UCC as in effect in the State of Delaware (the "Delaware UCC") is applicable (without regard to conflicts of law principles), upon the proper filing of the Depositor Financing Statement in the Delaware Filing Office, the security interest in favor of the Trust in the SSA Assets described in the Depositor Financing Statement will be perfected under the Delaware UCC by the filing of a financing statement with the Delaware Filing Office (the "Article 9 Filing SSA Assets"). (x) The Depositor search reports (as described in such opinion) identify no secured party who has filed a financing statement naming the Depositor as debtor and describing the Article 9 Filing SSA Assets. (xi) Assuming the Receivables are created under, and are evidenced solely by, motor vehicle retail installment contracts in the form of the contract attached as an exhibit to such opinion, such Receivables are "chattel paper" as defined in Section 9-102(11) of the New York UCC. (xii) The Registration Statement was declared effective under the Securities Act, any required filing of the Prospectus or any supplement thereto pursuant to Rule 424(b) has been made in the manner and in the time period required by Rule 424, and, to the best of the knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are threatened, and the Registration Statement and the Prospectus, and each amendment or supplement thereof, as of their respective effective or issue dates, complies as to form in all material respects with the requirements of the Securities Act and the Rules and Regulations. (xiii) The Trust Agreement is not required to be qualified under the Trust Indenture Act. (xiv) The Indenture has been duly qualified under the Trust Indenture Act in the manner contemplated by the Registration Statement, the Prospectus and this Agreement. -16- (xv) The Class A-1 Notes are "eligible securities" within the meaning of Rule 2a-7 promulgated under the Investment Company Act. (xvi) The Trust is not an "investment company" as such term is defined in the Investment Company Act, and the Trust will not become an "investment company" as a result of the consummation of the transaction as contemplated herein. (xvii) The statements in the Prospectus under the heading "ERISA CONSIDERATIONS" to the extent they constitute matters of law or legal conclusions, are correct in all material respects. Such opinion may contain such assumptions, qualifications and limitations as are usual and customary in opinions of this type and are reasonably acceptable to counsel to the Underwriters. In rendering such opinion, such counsel may state that they express no opinion as to the laws of any jurisdiction other than the federal law of the United States of America, the corporate laws of the State of Delaware, the laws of the State of California, and the laws of the State of New York. (g) The Representative shall have received an opinion of Latham & Watkins, counsel to the Depositor, HMFC and the Trust, addressed to the Representative, dated the Closing Date and satisfactory in form and substance to the Representative and counsel to the Underwriters, to the effect that: (i) In a properly presented and argued case in a proceeding under Title 11 of the United States Code, 11 U. S. C. Section 101 et seq. (the "Bankruptcy Code") in which HMFC is the debtor, the bankruptcy court would not, under applicable federal bankruptcy law, apply the doctrine of substantive consolidation to consolidate the assets and liabilities of the Depositor with the assets and liabilities of HMFC. (ii) In a properly presented and argued case in a proceeding under the Bankruptcy Code, in which either HMFC or the Depositor is the debtor, the bankruptcy court would uphold the creation of a "true sale" with respect to the sale of the Receivables from HMFC to the Depositor or from the Depositor to the Trust, as applicable. (iii) If the Depositor were to become a debtor in a case under the Bankruptcy Code, a federal bankruptcy court, which acted reasonably and correctly applied the law to the facts as set forth in such opinion after full consideration of all relevant factors, would hold either that (x) (A) no Receivables held by the Trust are property of the estate of the Depositor under Section 541 of the Bankruptcy Code and (B) the automatic stay arising pursuant to Section 362 of the Bankruptcy Code upon the commencement of a bankruptcy case involving the Depositor is not applicable to payments on the Receivables. Such opinion may contain such assumptions, qualifications and limitations as are usual and customary in opinions of this type and are reasonably acceptable to counsel to the -17- Underwriters. In rendering such opinion, such counsel may state that they express no opinion as to the laws of any jurisdiction other than the federal law of the United States of America, the laws of the State of California, and the laws of the State of New York. (h) The Representative shall have received an opinion of Latham & Watkins, counsel to the Depositor, HMFC and the Trust, addressed to the Representative, dated the Closing Date and satisfactory in form and substance to the Representative and counsel to the Underwriters, to the effect that such counsel has participated in conferences with officers and other representatives of HMFC, representatives of the independent public accountants for HMFC and your representatives at which the contents of the Registration Statement, the Prospectus and related matters were discussed and, although such counsel is not passing upon, and does not assume any responsibility for, the accuracy, completeness or fairness of the statements contained in the Registration Statement and the Prospectus and has not made any independent check or verification thereof, during the course of such participation, no facts came to their attention that caused them to believe that the Registration Statement or any amendment thereto, as of the Effective Date or as of such Closing Date, contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein not misleading, or that the Prospectus or any amendment or supplement thereto, as of its date or as of such Closing Date, contained any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, it being understood that such counsel will express no belief with respect to the financial statements, schedules or other financial data or exhibits (including numerical information with respect to the Receivables (as such term is defined in the Prospectus)) included in, or omitted from, the Prospectus, the second sentence in the paragraphs under each of the captions "The Owner Trustee" and "The Indenture Trustee". Such opinion may contain such assumptions, qualifications and limitations as are usual and customary in opinions of this type and are reasonably acceptable to counsel to the Underwriters. In rendering such opinion, such counsel may state that they express no opinion as to the laws of any jurisdiction other than the federal law of the United States of America and the laws of the State of New York. (i) Latham & Watkins, in its capacity as counsel for HMFC and the Depositor, shall have delivered one or more opinions satisfactory in form and substance to the Representative and their counsel, dated the Closing Date and addressed to the Representative, subject to certain considerations set forth therein, substantially to the effect that the provisions of the Control Agreement are effective under the New York UCC to perfect the security interest in favor of the Indenture Trustee in that portion of Collateral consisting of the securities account maintained with Wells Fargo Bank Minnesota, National Association (the "Securities Intermediary") described in the Control Agreement (the "Securities Account") and the Indenture Trustee's security interest in the Securities Account has priority over any other security interest in the Securities Account granted by the Issuer assuming no other secured party has control of, and the absence of any other control agreement with respect to, the Securities Account. We express no opinion as to the priority of any security interest in the Securities Account as against any security -18- interest in favor of the Securities Intermediary. (Capitalized terms in this paragraph not otherwise defined herein shall have the meanings specified in such opinions.) Such opinion may contain such assumptions, qualifications and limitations as are usual and customary in opinions of this type and are reasonably acceptable to counsel to the Underwriters. In rendering such opinion, such counsel may state that they express no opinion as to the laws of any jurisdiction other than the federal law of the United States of America and the laws of the State of New York. (j) Latham & Watkins, in its capacity as Federal tax counsel for the Depositor and the Trust, shall have delivered an opinion satisfactory in form and substance to the Representative and counsel to the Underwriters, dated the Closing Date and addressed to the Representative, to the effect that, for United States federal income tax purposes: (A) (i) the Trust will not be treated as an association or a publicly traded partnership, taxable as a corporation, and (ii) the Notes will be treated as indebtedness; (B) the statements in the Prospectus under the heading "MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES" to the extent they constitute matters of law or legal conclusions, are correct in all material respects. (k) The Representative shall have received an opinion of in-house counsel to the Indenture Trustee, addressed to the Representative, dated the Closing Date and satisfactory in form and substance to the Representative and counsel to the Underwriters, to the effect that: (i) The Indenture Trustee is a national banking association duly incorporated and validly existing under the laws of the United States. (ii) The Indenture Trustee has the full corporate trust power to accept the office of trustee under Indenture and to enter into and perform its obligations under the Indenture. (iii) The execution and delivery of the Indenture and the performance by the Indenture Trustee of its obligations under the Indenture have been duly authorized by all necessary action of the Indenture Trustee. (iv) The Indenture constitutes a valid and binding obligation of the Indenture Trustee enforceable against it in accordance with their terms under the laws of New York and the Federal laws of the United States. (v) The execution and delivery by the Indenture Trustee of the Indenture does not require any consent, approval or authorization of, or any registration or filing with, any New York or United States Federal governmental authority. (vi) Each of the Notes has been duly executed by the Indenture Trustee as trustee and authenticating agent. (l) The Representative shall have received an opinion addressed to the Representative, of Richards Layton & Finger, counsel to the Owner Trustee, dated the Closing -19- Date and satisfactory in form and substance to the Representative and counsel to the Underwriters, to the effect that: (i) The Owner Trustee is duly formed and validly existing under the laws of the State of Delaware with trust powers and with its principal place of business in the State of Delaware. (ii) The Owner Trustee has the full corporate trust power to accept the office of trustee under the Trust Agreement and to enter into and perform its obligations under the Trust Agreement. (iii) The execution and delivery of the Trust Agreement and the performance by the Owner Trustee of its obligations under the Trust Agreement have been duly authorized by all necessary action of the Owner Trustee. (iv) The execution and delivery by the Owner Trustee of the Trust Agreement does not require any consent, approval or authorization of, or any registration or filing with Delaware or United States Federal governmental authority. (v) The Owner Trustee has duly authorized, executed and delivered the Trust Agreement and on behalf of the Trust, the Owner Trustee has duly executed and delivered the Transaction Documents to which the Trust is a party. (vi) The Notes and the Certificates have been duly executed and delivered by the Owner Trustee, on behalf of the Trust. (m) The Representative shall have received an opinion addressed to the Representative, of Richards Layton & Finger, special Delaware counsel for the Trust, dated the Closing Date and satisfactory in form and substance to the Representative and counsel to the Underwriters, to the effect that: (i) The Trust Agreement constitutes the legal, valid and binding obligation of the Owner Trustee and the Depositor enforceable against the Owner Trustee and the Depositor in accordance with its terms subject to (i) applicable bankruptcy, insolvency, moratorium, receivership, reorganization, fraudulent conveyance and similar laws relating to and affecting the rights and remedies of creditors generally, and (ii) principles of equity (regardless of whether considered and applied in a proceeding in equity or at law). (ii) The Trust has been duly formed and is validly existing as a statutory trust under the Delaware Statutory Trust Act, 12 Del. C. Section 3801, et seq. (the "Statutory Trust Act") and has the power and authority under the Trust Agreement and the Statutory Trust Act to execute, deliver and perform its obligations under the Transaction Documents to which the Trust is a party. (iii) The Transaction Documents to which the Trust is a party have been duly authorized, executed and delivered by the Trust. -20- (iv) To the extent that Article 9 of the Uniform Commercial Code as in effect in the State of Delaware on the date hereof (the "Delaware UCC") is applicable (without regard to conflict of laws principles), upon the filing of the Financing Statement with the Division, the Indenture Trustee will have a perfected security interest in the Trust's rights in that portion of the Collateral (as defined in the Indenture) described in the Financing Statement that may be perfected by the filing of a UCC financing statement with the Division (the "Filing Collateral") and the proceeds (as defined in Section 9-102(a)(64) of the Delaware UCC) thereof. (v) The Search Report sets forth the correct filing office and the correct debtor name that are necessary to identify those persons, under the Delaware UCC, who have on file financing statements against the Trust covering the Filing Collateral as of the Effective Time. The Search Report identifies no secured party who has filed with the Division a financing statement naming the Trust as debtor and describing the Filing Collateral prior to the Effective Time. (vi) Assuming for federal income tax purposes that the Trust will not be classified as an association or a publicly traded partnership taxable as a corporation, and that the Notes will be characterized as indebtedness for federal income tax purposes, then the Trust will not be subject to any franchise or income tax under the laws of the State of Delaware, and the Notes will also be characterized as indebtedness for Delaware tax purposes. (vii) Under Section 3805(c) of the Statutory Trust Act, the Trust is a separate legal entity and, assuming that the Sale and Servicing Agreement conveys good title to the Trust property to the Trust as a true sale and not as a security arrangement, the Trust rather than the holders of the Certificates will hold whatever title to the Trust property as may be conveyed to it from time to time pursuant to the Sale and Servicing Agreement, except to the extent that the Trust has taken action to dispose of or otherwise transfer or encumber any part of the Trust property. (viii) Under Section 3805(b) of the Statutory Trust Act, no creditor of any Certificateholder shall have any right to obtain possession of, or otherwise exercise legal or equitable remedies with respect to, the property of the Trust except in accordance with the terms of the Trust Agreement. (ix) Under 3808(a) and (b) of the Statutory Trust Act, the Trust may not be terminated or revoked by any holder of Certificates, and the dissolution, termination or bankruptcy of any holders of Certificates shall not result in the termination or dissolution of the Trust, except to the extent otherwise provided in the Trust Agreement. (x) The execution, delivery and performance by the Owner Trustee of the Trust Agreement and, on behalf of the Trust, the Transaction Documents to which the Trust is a party, do not require any consent, approval or authorization of, or any registration or filing with, any governmental authority of the State of Delaware, except for the filing of the Certificate of Trust with the Secretary of State. -21- (xi) Neither the consummation by the Owner Trustee of the transactions contemplated in the Trust Agreement or, on behalf of the Trust, the transactions contemplated in the Transaction Documents to which the Trust is a party nor the fulfillment of the terms thereof by the Owner Trustee will conflict with or result in a breach or violation of any law of the State of Delaware. Such opinion may contain such assumptions, qualifications and limitations as are usual and customary in opinions of this type and are reasonably acceptable to counsel to the Underwriters. In rendering such opinion, such counsel may state that they express no opinion as to the laws of any jurisdiction other than the laws of the State of Delaware. Capitalized terms used in the above opinion paragraphs and not otherwise defined in this Agreement will have the meanings ascribed to such terms in the relevant opinion. (n) The Representative shall have received from McKee Nelson LLP, counsel for the Underwriters, such opinion or opinions, dated the Closing Date, with respect to such matters as the Representative may require, and the Depositor and HMFC shall have furnished to such counsel such documents as it may reasonably request for the purpose of enabling it to pass upon such matters. (o) The Representative shall have received copies of each opinion of counsel delivered to any rating agency, together with a letter addressed to the Representative, dated the Closing Date, to the effect that the Representative and the Underwriters may rely on each such opinion to the same extent as though such opinion was addressed to each as of its date. (p) The Representative shall have received certificates dated the Closing Date of any two of the President, Chief Financial Officer, any Vice President, the Controller or the Treasurer of the Depositor and HMFC in which such officers shall state that: (A) the representations and warranties made by such entity contained in the Transaction Documents and this Agreement are true and correct, that such party has complied with all agreements and satisfied all conditions on its part to be performed or satisfied under such agreements on or before the Closing Date, (B) since the date of this Agreement there has not occurred any material adverse change, or any development involving a prospective material adverse change, in or affecting the condition, financial or otherwise, or in the earnings, business or operations of the Trust, the Depositor or HMFC except as disclosed to the Representative in writing, and (C) there are no actions, proceedings or investigations to which the Depositor or HMFC is a party or that are threatened before any court, administrative agency or other tribunal having jurisdiction over HMFC or the Depositor, (i) that are required to be disclosed in the Registration Statement, (ii) asserting the invalidity of this Agreement, any Transaction Document or the Notes, (iii) seeking to prevent the issuance of the Notes or the consummation of any of the transactions contemplated by this Agreement or the Transaction Documents, (iv) which could reasonably be expected to materially and adversely affect the performance by the Depositor or HMFC of its obligations under, or the validity or enforceability of, this Agreement, any Transaction Document or the Notes or (v) seeking adversely to affect the federal income tax attributes of the Notes as described in the Prospectus under the heading "MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES." -22- (q) The Representative shall have received evidence satisfactory to the Representative and counsel to the Underwriters that, on or before the Closing Date, UCC-1 financing statements, have been or are being filed in all applicable governmental offices reflecting (A) the transfer of the interest of HMFC in the Receivables, and the proceeds thereof to the Depositor pursuant to the Receivables Purchase Agreement, (B) the transfer of the interest of the Depositor in the Receivables Purchase Agreement, the Receivables, and the proceeds thereof to the Trust pursuant to the Sale and Servicing Agreement, and (C) the grant by the Trust to the Indenture Trustee under the Indenture of a security interest in the interest of the Trust in the Receivables Purchase Agreement, the Receivables, the Collateral and the proceeds thereof. (r) The Class A-1 Notes shall have been rated in the highest short-term rating by both Standard and Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P"), Fitch Ratings ("Fitch") and Moody's Investors Service, Inc. ("Moody's"). The Class A Notes (other than the Class A-1 Notes) shall have been rated in the highest long-term rating by each of S&P, Fitch and Moody's. The Class B Notes shall have been rated in at least the second highest rating category by each of S&P, Fitch and Moody's. The Class C Notes shall have been rated in at least the third highest rating category by each of S&P, Fitch and Moody's. The Class D Notes shall have been rated in at least the fourth highest rating category by each of S&P, Fitch and Moody's. (s) The Representative shall have received, from each of HMFC and the Depositor, a certificate executed by a secretary or assistant secretary thereof to which shall be attached certified copies of the: (i) charter, (ii) by-laws, (iii) applicable resolutions and (iv) designation of incumbency of each such entity. (t) The Representative shall have received evidence of any required Lien releases to be filed or recorded (immediately following the Closing-Date) with respect to the Permitted Liens affecting the Receivables from all applicable creditors of HMFC, in form and substance satisfactory to the Representative and counsel to the Underwriters. (u) All representations and warranties made by or on behalf of HMFC and the Depositor in the Transaction Documents to which each is a party are true and correct as of the Closing Date. The Depositor will provide or cause to be provided to the Representative conformed copies of such opinions, certificates, letters and documents as the Representative or counsel to the Underwriters reasonably request. SECTION 8. Termination. This Agreement shall be subject to termination in the sole discretion of the Representative by notice to the Depositor given on or prior to the Closing Date in the event that either the Depositor or HMFC shall have failed, refused or been unable to perform all obligations and satisfy all conditions on its part to be performed or satisfied hereunder at or prior thereto or, if at or prior to the Closing Date, (a) trading in securities generally on the New York Stock Exchange shall have been suspended or materially limited or minimum or maximum prices shall have been established by or on, as the case may be, the Securities and Exchange Commission or the New York Stock Exchange; (b) trading of any securities of HMFC or the Depositor shall have been suspended on any exchange or in any over- -23- the-counter market; (c) a general moratorium on commercial banking activities shall have been declared by either federal or New York State authorities; (d) a material disruption has occurred in commercial banking or securities settlement or clearance services in the United States or with respect to Clearstream or Euroclear systems in Europe; (e) there shall have occurred (i) an outbreak or escalation of hostilities between the United States and any foreign power, (ii) an outbreak or escalation of any other insurrection or armed conflict involving the United States, or (iii) any other calamity or crisis or materially adverse change in general economic, political or financial conditions having an effect on the U. S. financial markets that, in the sole judgment of the Representative, makes it impractical or inadvisable to proceed with the offering or the delivery of the Notes as contemplated by the Prospectus, as amended as of the date hereof; (f) any change in or affecting the Receivables or particularly the business or properties of the Trust, the Depositor or HMFC shall have occurred which, in the judgment of the Representative, materially impairs the investment quality of the Notes or makes it impractical or inadvisable to market the Notes; or (g) any downgrading in the rating of any debt securities of HMFC, the Depositor, if any, by any "nationally recognized statistical rating organization" (as defined for purposes of Rule 436(g) under the Securities Act), or any public announcement that any such organization has under surveillance or review its rating of any such debt securities (other than an announcement with positive implications of a possible upgrading, and no implication of a possible downgrading, of such rating) shall have occurred. Termination of this Agreement pursuant to this Section 8 shall be without liability of any party to any other party except for the liability of HMFC in relation to expenses as provided in Sections 6 hereof, the indemnity provided in Section 9 hereof and any liability arising before or in relation to such termination. SECTION 9. Indemnification and Contribution. (a) The Depositor and HMFC shall, jointly and severally, indemnify and hold harmless each Underwriter, the directors, officers, employees and agents of each Underwriter and each person, if any, who controls any Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any and all losses, claims, damages or liabilities, joint or several, to which such Underwriter or such controlling person may become subject under the Securities Act or otherwise, to the extent such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement made by the Depositor or HMFC in Section 2 hereof, (ii) any untrue statement or alleged untrue statement of any material fact contained or incorporated in the Registration Statement, the Preliminary Prospectus or the Prospectus or any amendment or supplement thereto, or (iii) the omission or alleged omission to state in the Registration Statement, the Preliminary Prospectus or the Prospectus or any amendment or supplement thereto a material fact required to be stated therein or necessary to make the statements therein, not misleading, -24- and will reimburse, as incurred, each such indemnified party for any legal or other costs or expenses reasonably incurred by it in connection with investigating, defending against or appearing as a third-party witness in connection with any such loss, claim, damage, liability or action; provided, however, that the Depositor and HMFC will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement, the Preliminary Prospectus or the Prospectus or any amendment or supplement thereto in connection with the Underwriters' Information; provided, further, that the Depositor and HMFC shall not be liable to any Underwriter or any of the directors, officers, employees and agents of an Underwriter and each person, if any, who controls any Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act with respect to any loss, claim, damage or liability that results from the fact that the Underwriter sold Notes to a person to whom there was not sent or given, at or prior to the written confirmation of such sale, if delivery thereof was required, a copy of the Prospectus or the Prospectus as then amended or supplemented, whichever is most recent, if the Depositor has previously furnished copies thereof to such Underwriter. The indemnity provided for in this Section 9 shall be in addition to any liability which the Depositor and HMFC may otherwise have. The Depositor and HMFC will not, without the prior written consent of the Representative, settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action, suit or proceeding in respect of which indemnification may be sought hereunder (whether or not the Representative or any person who controls the Representative is a party to such claim, action, suit or proceeding), unless such settlement, compromise or consent (i) includes an unconditional release of all of the Underwriters and such controlling persons from all liability arising out of such claim, action, suit or proceeding and (ii) does not include a statement as to or admission of, fault, culpability or a failure to act by or on behalf of any Underwriter or controlling person. (b) Each Underwriter, severally and not jointly, will indemnify and hold harmless each of the Depositor and HMFC, each of its directors and officers and each person, if any, who controls the Depositor or HMFC within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any losses, claims, damages or liabilities to which the Depositor, HMFC or any such director, officer or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in the Preliminary Prospectus or the Prospectus Supplement (or any amendment or supplement thereto) or (ii) the omission or the alleged omission to state in the Preliminary Prospectus or the Prospectus Supplement (or any amendment or supplement thereto) a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with the Underwriters' Information, and will reimburse, as incurred, any legal or other expenses reasonably incurred by the Depositor, HMFC or any such director, officer or controlling person in connection with investigating, defending against or appearing as a thirdparty witness in connection with any such loss, claim, damage, liability or any action in respect thereof. The remedies provided for in this Section 9 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity. -25- (c) In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to paragraph (a) or (b) of this Section 9, such person (for purposes of this paragraph (c), the "indemnified party") shall, promptly after receipt by such party of notice of the commencement of such action, notify the person against whom such indemnity may be sought (for purposes of this paragraph (c), the "indemnifying party"), but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party under this Section 9. In case any such action is brought against any indemnified party, and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (which may be counsel to such indemnifying party if otherwise reasonably acceptable to the indemnified party); provided, however, that if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be one or more legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, the indemnifying party shall not have the right to direct the defense of such action on behalf of such indemnified party or parties and such indemnified party or parties shall have the right to select separate counsel to defend such action on behalf of such indemnified party or parties. After notice from the indemnifying party to such indemnified party of its election so to assume the defense of any such action and approval by such indemnified party of counsel appointed to defend such action, the indemnifying party will not be liable to such indemnified party under this Section 9 for any legal or other expenses, other than reasonable costs of investigation, subsequently incurred by such indemnified party in connection with the defense thereof, unless (i) the indemnified party shall have employed separate counsel in accordance with the proviso to the next preceding sentence (it being understood, however, that in connection with such action the indemnifying party shall not be liable for the expenses of more than one separate counsel (in addition to local counsel in each applicable local jurisdiction) in any one action or separate but substantially similar actions arising out of the same general allegations or circumstances, designated in writing by the Representative in the case of paragraph (a) of this Section 9, representing the indemnified parties under such paragraph (a) who are parties to such action or actions), (ii) the indemnifying party has authorized the employment of counsel for the indemnified party at the expense of the indemnifying party, or (iii) the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with a conflict of interest. All fees and expenses reimbursed pursuant to this paragraph (c) shall be reimbursed as they are incurred. After such notice from the indemnifying party to such indemnified party, the indemnifying party will not be liable for the costs and expenses of any settlement of such action effected by such indemnified party without the consent of the indemnifying party. No indemnifying party shall, without the written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnification could have been sought hereunder by such indemnified party, unless such settlement (x) includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding and (y) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any indemnified party. -26- (d) In circumstances in which the indemnity agreement provided for in the preceding paragraphs of this Section 9 is unavailable or insufficient, for any reason, to hold harmless an indemnified party in respect of any losses, claims, damages or liabilities (or actions in respect thereof), each indemnifying party, in order to provide for just and equitable contribution, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect (i) the relative benefits received by the indemnifying party or parties on the one hand and the indemnified party on the other from the offering of Notes or (ii) if the allocation provided by the foregoing clause (i) is not permitted by applicable law, not only such relative benefits but also the relative fault of the indemnifying party or parties on the one hand and the indemnified party on the other in connection with the statements or omissions or alleged statements or omissions that resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Depositor and HMFC on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total proceeds from the offering of the Notes (before deducting expenses) received by the Depositor and HMFC (including for such purpose, the value of the Certificates) bear to the total discounts and commissions received by the Underwriters (the "Spread") as set forth in the Prospectus. The relative fault of the parties shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Depositor, HMFC or the Underwriters, the parties' relative intents, knowledge, access to information and opportunity to correct or prevent such statement or omission, and any other equitable considerations appropriate in the circumstances. The Depositor, HMFC and the Underwriters agree that it would not be equitable if the amount of such contribution were determined by pro rata or per capita allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation that does not take into account the equitable considerations referred to above in this paragraph (d). Notwithstanding any other provision of this paragraph (d), no Underwriter shall be obligated to make contributions hereunder that in the aggregate exceed the amount by which the Spread received by it in the initial offering of such Notes, less the aggregate amount of any damages that such Underwriter has otherwise been required to pay in respect of the same or any substantially similar claim, and no person guilty of fraudulent misrepresentation (within the meaning of Section 11 (f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations to contribute hereunder are several in proportion to their respective principal amount of Securities they have purchased hereunder, and not joint. For purposes of this paragraph (d), each person, if any, who controls an Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and each director, officer, employee and agent of an Underwriter shall have the same rights to contribution as such Underwriter, and each director of the Depositor and HMFC, each officer of the Depositor and HMFC and each person, if any, who controls the Depositor and HMFC within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, shall have the same rights to contribution as the Depositor and HMFC. SECTION 10. Defaults by an Underwriter. If any one or more Underwriter(s) fail(s) to purchase and pay for any of the Notes agreed to be purchased by such Underwriter(s) hereunder, and such failure constitutes a default in the performance of its or their obligations under this -27- Agreement, the remaining Underwriter(s) shall be obligated severally to take up and pay for (in the respective proportions that the amount of Notes set forth opposite their names in Schedule I bears to the aggregate amount of Notes set forth opposite the names of all the remaining Underwriter(s)) the Notes that the defaulting Underwriter(s) agreed but failed to purchase; provided, however, that if the aggregate amount of Notes that the defaulting Underwriter(s) agreed but failed to purchase exceeds 10% of the aggregate principal amount of Notes, the remaining Underwriter(s) shall have the right to purchase all, but shall not be under any obligation to purchase any, of the Notes, and if such non-defaulting Underwriter(s) do not purchase all the Notes, this Agreement will terminate without liability to any non-defaulting Underwriter. In the event of a default by any Underwriter as set forth in this paragraph, the Closing Date shall be postponed for such period, not exceeding seven days, as the remaining Underwriter(s) shall determine in order that the required changes in the Prospectus Supplement or in any other documents or arrangements may be effected. Nothing contained in this Agreement shall relieve any defaulting Underwriter(s) of any liability to the Depositor, HMFC, their Affiliates and any non-defaulting Underwriter(s) for damages occasioned by its default hereunder. SECTION 11. Survival of Representations and Obligations. The respective indemnities, agreements, representations, warranties and other statements set forth in or made pursuant to this Agreement or contained in certificates of officers submitted pursuant hereto shall remain operative and in full force and effect, regardless of any investigation or statement as to the results thereof, and will survive delivery of and payment for the Notes. If for any reason the purchase of the Notes by the Underwriters is not consummated, each of the Depositor and HMFC shall remain responsible for the expenses to be paid or reimbursed pursuant to Section 6 and the obligations pursuant to Section 9 shall remain in effect. If for any reason the purchase of the Notes by the Underwriters is not consummated (other than as a result of any Underwriters' breach under Section 4 of this Agreement), the Depositor and HMFC will reimburse the Underwriters severally, upon demand, for all out-of-pocket expenses (including reasonable fees and disbursements of counsel) incurred by any Underwriter in connection with the offering of the Notes. SECTION 12. Notices. Any notice or notification in any form to be given under this Agreement may be delivered in person or sent by mail, facsimile or telephone (subject in the case of a communication by telephone to confirmation by facsimile) addressed to: in the case of the Depositor: Hyundai ABS Funding Corporation 10550 Talbert Avenue Fountain Valley, California 92708 Facsimile: 714-965-7098 Attention: Vice President; Secretary in the case of HMFC: -28- Hyundai Motor Finance Company 10550 Talbert Avenue Fountain Valley, California 92708 Facsimile 714-965-7098 Attention: Vice President; Finance in the case of the Representative: Banc One Capital Markets, Inc. 1 Bank One Plaza Mail Suite IL 1-0596 Chicago, Illinois 60670 Facsimile: 312-732-4487 Attention: Robert Coats Any such notice shall take effect, in the case of delivery, at the time of delivery and, in the case of facsimile, at the time of dispatch. SECTION 13. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto, their respective successors and agents, and the directors, officers and control persons referred to in Section 9, and no other person will have any rights or obligations hereunder. SECTION 14. The Representative. The Representative represents and warrants to the Depositor and HMFC that it is duly authorized to enter into this Agreement. The Representative shall act for the several Underwriters in connection with this financing, and any action under this Agreement taken by the Representative will be binding upon all the Underwriters. In all dealings hereunder, the parties hereto shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Underwriter made or given by the Representative. SECTION 15. Miscellaneous. (a) Time shall be of the essence of this Agreement. (b) The headings herein are inserted for convenience of reference only and are not intended to be part of, or to affect, the meaning or interpretation of this Agreement. (c) For purposes of this Agreement, (a) "business day" means any day on which the New York Stock Exchange is open for trading, and (b) "subsidiary" has the meaning set forth in Rule 405 under the Securities Act. -29- (d) This Agreement may be executed in any number of counterparts, all of which, taken together, shall constitute one and the same Agreement and any party may enter into this Agreement by executing a counterpart. (e) This Agreement shall inure to the benefit of and shall be binding upon the several Underwriters, the Depositor, HMFC and their respective successors and legal representatives, and nothing expressed or mentioned in this Agreement is intended or shall be construed to give any other person any legal or equitable right, remedy or claim under or in respect of this Agreement, or any provisions herein contained, this Agreement and all conditions and provisions hereof being intended to be and being for the sole and exclusive benefit of such persons and for the benefit of no other person, except that (i) the indemnities of the Depositor and HMFC contained in Section 9 hereof shall also be for the benefit of any person or persons who control any Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and (ii) the indemnities of the Underwriters contained in Section 9 hereof shall also be for the benefit of the directors of the Depositor and HMFC, the officers of the Depositor and HMFC and any person or persons who control the Depositor or HMFC within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act. No purchaser of Notes from any Underwriter shall be deemed a successor because of such purchase. (f) The respective representations, warranties, agreements, covenants, indemnities and other statements of the Depositor and HMFC, its officers and the several Underwriters set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement shall remain in full force and effect, regardless of (i) any investigation made by or on behalf of the Depositor or HMFC, any of its officers, directors, employees or agents, any Underwriter or any controlling person referred to in Section 9 hereof and (ii) delivery of and payment for the Notes. The respective agreements, covenants, indemnities and other statements set forth in Sections 5 and 9 hereof shall remain in full force and effect, regardless of any termination or cancellation of this Agreement. SECTION 16. Severability. It is the desire and intent of the parties that the provisions of this Agreement be enforced to the fullest extent permissible under the law and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, in the event that any provision of this Agreement would be held in any jurisdiction to be invalid, prohibited or unenforceable for any reason, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction. SECTION 17. Governing Law. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS. -30- If the foregoing is in accordance with your understanding, please sign and return to us five counterparts hereof, and upon the acceptance hereof by you, on behalf of each of the Underwriters, this letter and such acceptance hereof shall constitute a binding agreement among each of the Underwriters and the Depositor and HMFC. Very truly yours, HYUNDAI ABS FUNDING CORPORATION By: /s/ David A. Hoeller --------------------------------- Name: David A. Hoeller Title: Vice President & Secretary HYUNDAI MOTOR FINANCE COMPANY By: /s/ K.B. Lee --------------------------------- Name: K.B. Lee Title: Treasurer The foregoing Agreement is hereby confirmed and accepted as of the date first above written. BANC ONE CAPITAL MARKETS, INC. on behalf of itself and as Representative of the several Underwriters By: /s/ Jeffrey J. Orr ------------------------ Name: Jeffrey J. Orr Title: Managing Director -31- SCHEDULE I
Class A-1 Class A-2 Class A-3 Class A-4 Underwriter Notes Notes Notes Notes - ----------------------------------- ------------ ------------ ------------ ------------ Banc One Capital Markets, Inc...... $ 47,175,000 $ 66,877,500 $ 36,075,000 $ 33,471,495 Citigroup Global Markets Inc....... $ 47,175,000 $ 66,877,500 $ 36,075,000 $ 33,471,495 ABN AMRO Incorporated.............. $ 44,200,000 $ 62,660,000 $ 33,800,000 $ 31,360,680 Deutsche Bank Securities Inc....... $ 15,725,000 $ 22,292,500 $ 12,025,000 $ 11,157,165 SG Cowen Securities Corporation.... $ 15,725,000 $ 22,292,500 $ 12,025,000 $ 11,157,165 Total.............................. $170,000,000 $241,000,000 $130,000,000 $120,618,000
Class B Class C Class D Underwriter Notes Notes Notes - ----------------------------------- ----------- ----------- ----------- Banc One Capital Markets, Inc. .... $19,517,000 $ 5,855,000 $20,492,500 Citigroup Global Markets Inc. ..... $19,517,000 $ 5,855,000 $20,492,500 ABN AMRO Incorporated ............. $ 0 $ 0 $ 0 Deutsche Bank Securities Inc. ..... $ 0 $ 0 $ 0 SG Cowen Securities Corporation ... $ 0 $ 0 $ 0 Total ............................. $39,034,000 $11,710,000 $40,985,000
-32- SCHEDULE II
Original Principal Security Balance $ Price $ - ------------------------ ------------------ --------------- Class A-1 Notes $170,000,000.00 $170,000,000.00 Class A-2 Notes $241,000,000.00 $240,971,569.23 Class A-3 Notes $130,000,000.00 $129,998,256.70 Class A-4 Notes $120,618,000.00 $120,610,988.48 Class B Notes $ 39,034,000.00 $ 39,027,751.83 Class C Notes $ 11,710,000.00 $ 11,708,891.18 Class D Notes $ 40,985,000.00 $ 40,976,359.95 Total Price to Depositor $753,347,000.00 $751,860,403.72
-33- SCHEDULE III LIST OF OFFICES TO FILE FINANCING STATEMENTS 1. HMFC Financing Statements - California 2. Depositor Financing Statements - Delaware -34- SCHEDULE IV LIST OF PERMITTED LIENS 1. Second Amended and Restated Receivables Purchase Agreement, dated as of July 23, 2002, as amended, among Hyundai BC Funding Corporation, Asset One Securitization LLC, Sheffield Receivables Corporation, Amsterdam Funding Corporation, Hyundai Motor Finance Company, Barclays Bank PLC, ABN AMRO Bank N.V., and Societe Generale. 2. Purchase and Sale Agreement, dated as of January 17, 2000, as amended, between Hyundai Motor Finance Company, as seller, and Hyundai BC Funding Corporation, as purchaser. -35- EX-4 4 ex4-1.txt EXHIBIT 4.1 Exhibit 4.1 EXECUTION COPY INDENTURE between HYUNDAI AUTO RECEIVABLES TRUST 2003-A, as Issuer and WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, as Indenture Trustee Dated as of November 7, 2003 TABLE OF CONTENTS
Page ---- ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE..........................2 Section 1.01. Definition....................................................2 Section 1.02. Rules of Construction........................................11 Section 1.03. Incorporation by Reference of Trust Indenture Act............11 ARTICLE II. THE NOTES.........................................................12 Section 2.01. Form ........................................................12 Section 2.02. Execution, Authentication and Delivery.......................12 Section 2.03. Temporary Notes..............................................13 Section 2.04. Registration; Registration of Transfer and Exchange..........13 Section 2.05. [Reserved]...................................................15 Section 2.06. Mutilated, Destroyed, Lost or Stolen Notes...................15 Section 2.07. Persons Deemed Owners........................................16 Section 2.08. Payment of Principal and Interest; Defaulted Interest........16 Section 2.09. Cancellation.................................................17 Section 2.10. Book-Entry Notes.............................................17 Section 2.11. Notices to Clearing Agency...................................18 Section 2.12. Definitive Notes.............................................18 Section 2.13. Tax Treatment................................................18 ARTICLE III. COVENANTS........................................................18 Section 3.01. Payment of Principal and Interest............................18 Section 3.02. Maintenance of Office or Agency..............................19 Section 3.03. Money for Payments To Be Held in Trust.......................19 Section 3.04. Existence....................................................21 Section 3.05. Protection of Trust Estate...................................21 Section 3.06. Opinions as to Trust Estate..................................21 Section 3.07. Performance of Obligations; Servicing of Receivables.........22 Section 3.08. Negative Covenants...........................................23 Section 3.09. Annual Statement as to Compliance............................23 Section 3.10. Issuer May Consolidate, etc., Only on Certain Terms..........24 Section 3.11. Successor or Transferee......................................25 Section 3.12. No Other Business............................................26 Section 3.13. No Borrowing.................................................26 Section 3.14. Servicer's Obligations.......................................26 Section 3.15. Guarantees, Loans, Advances and Other Liabilities............26 Section 3.16. Capital Expenditures.........................................26 Section 3.17. Removal of Administrator.....................................26 Section 3.18. Restricted Payments..........................................26 Section 3.19. Notice of Events of Default..................................27 Section 3.20. Further Instruments and Acts.................................27 ARTICLE IV. SATISFACTION AND DISCHARGE........................................27 Section 4.01. Satisfaction and Discharge of Indenture......................27
i Section 4.02. Application of Trust Money...................................28 Section 4.03. Repayment of Moneys Held by Paying Agent.....................28 Section 4.04. Release of Collateral........................................28 ARTICLE V. REMEDIES...........................................................29 Section 5.01. Events of Default............................................29 Section 5.02. Acceleration of Maturity; Rescission and Annulment...........30 Section 5.03. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee.........................................31 Section 5.04. Remedies; Priorities.........................................33 Section 5.05. Optional Preservation of the Receivables.....................36 Section 5.06. Limitation of Suits..........................................36 Section 5.07. Unconditional Rights of Noteholders To Receive Principal and Interest..............................................37 Section 5.08. Restoration of Rights and Remedies...........................37 Section 5.09. Rights and Remedies Cumulative...............................37 Section 5.10. Delay or Omission Not a Waiver...............................37 Section 5.11. Control by the Controlling Class of Noteholders..............37 Section 5.12. Waiver of Past Defaults......................................38 Section 5.13. Undertaking for Costs........................................38 Section 5.14. Waiver of Stay or Extension Laws.............................39 Section 5.15. Action on Notes..............................................39 Section 5.16. Performance and Enforcement of Certain Obligations...........39 ARTICLE VI. THE INDENTURE TRUSTEE.............................................40 Section 6.01. Duties of Indenture Trustee..................................40 Section 6.02. Rights of Indenture Trustee..................................41 Section 6.03. Individual Rights of Indenture Trustee.......................42 Section 6.04. Indenture Trustee's Disclaimer...............................43 Section 6.05. Notice of Defaults...........................................43 Section 6.06. Reports by Indenture Trustee to Holders......................43 Section 6.07. Compensation and Indemnity...................................43 Section 6.08. Replacement of Indenture Trustee.............................44 Section 6.09. Successor Indenture Trustee by Merger........................45 Section 6.10. Appointment of Co-Indenture Trustee or Separate Indenture Trustee...................................................45 Section 6.11. Eligibility; Disqualification................................46 Section 6.12. [Reserved]...................................................46 Section 6.13. Preferential Collection of Claims Against Issuer.............46 Section 6.14. Waiver of Setoffs............................................46 ARTICLE VII. NOTEHOLDERS' LISTS AND REPORTS...................................47 Section 7.01. Issuer To Furnish Indenture Trustee Names and Addresses of Noteholders..................................47 Section 7.02. Preservation of Information; Communications to Noteholders...............................................47 Section 7.03. Reports by Issuer............................................47 Section 7.04. Reports by Indenture Trustee.................................48
ii ARTICLE VIII. ACCOUNTS, DISBURSEMENTS AND RELEASES............................48 Section 8.01. Collection of Money..........................................48 Section 8.02. Trust Accounts...............................................48 Section 8.03. General Provisions Regarding Accounts........................51 Section 8.04. Release of Trust Estate......................................51 Section 8.05. Opinion of Counsel...........................................52 ARTICLE IX. SUPPLEMENTAL INDENTURES...........................................52 Section 9.01. Supplemental Indentures Without Consent of Noteholders.......52 Section 9.02. Supplemental Indentures with Consent of Noteholders..........53 Section 9.03. Execution of Supplemental Indentures.........................54 Section 9.04. Effect of Supplemental Indenture.............................55 Section 9.05. Reference in Notes to Supplemental Indentures................55 Section 9.06. Conformity with Trust Indenture Act..........................55 ARTICLE X. REDEMPTION OF NOTES................................................55 Section 10.01. Redemption..................................................55 Section 10.02. Form of Redemption Notice...................................56 Section 10.03. Notes Payable on Redemption Date............................56 ARTICLE XI. MISCELLANEOUS.....................................................56 Section 11.01. Compliance Certificates and Opinions, etc...................56 Section 11.02. Form of Documents Delivered to Indenture Trustee............58 Section 11.03. Acts of Noteholders.........................................59 Section 11.04. Notices, etc., to Indenture Trustee, Issuer and Rating Agencies..................................................59 Section 11.05. Notices to Noteholders; Waiver..............................60 Section 11.06. Alternate Payment and Notice Provisions.....................60 Section 11.07. Effect of Headings and Table of Contents....................61 Section 11.08. Successors and Assigns......................................61 Section 11.09. Separability................................................61 Section 11.10. Benefits of Indenture.......................................61 Section 11.11. Legal Holidays..............................................61 Section 11.12. GOVERNING LAW...............................................61 Section 11.13. Counterparts................................................61 Section 11.14. Recording of Indenture......................................61 Section 11.15. Trust Obligation............................................61 Section 11.16. No Petition.................................................62 Section 11.17. Inspection..................................................62 Section 11.18. Conflict with Trust Indenture Act...........................62 Section 11.19. Limitation of Liability.....................................62 Section 11.20. Representations and Warranties..............................63 EXHIBITS SCHEDULE A Schedule of Receivables EXHIBIT A-1 Form of Class A-1 Note EXHIBIT A-2 Form of Class A-2 Note EXHIBIT A-3 Form of Class A-3 Note
iii EXHIBIT A-4 Form of Class A-4 Note EXHIBIT B Form of Class B Note EXHIBIT C Form of Class C Note EXHIBIT D Form of Class D Note EXHIBIT E Form of the Note Depository Agreement
iv THIS INDENTURE, dated as of November 7, 2003, is between HYUNDAI AUTO RECEIVABLES TRUST 2003-A, a Delaware statutory trust (the "Issuer"), and WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking association, as trustee and not in its individual capacity (the "Indenture Trustee"). Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the Holders of the Issuer's 1.11% Asset Backed Notes, Class A-1 (the "Class A-1 Notes"), 1.56% Asset Backed Notes, Class A-2 (the "Class A-2 Notes"), 2.33% Asset Backed Notes, Class A-3 (the "Class A-3 Notes"), 3.02% Asset Backed Notes, Class A-4 (the "Class A-4 Notes"), 2.99% Asset Backed Notes, Class B (the "Class B Notes"), 3.19% Asset Backed Notes, Class C (the "Class C Notes") and 4.06% Asset Backed Notes, Class D (the "Class D Notes" and, together with the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes, Class B Notes and Class C Notes, the "Notes"): GRANTING CLAUSE The Issuer hereby Grants to the Indenture Trustee at the Closing Date, as Indenture Trustee for the benefit of the Holders of the Notes, all of the Issuer's right, title and interest in and to (a) the Receivables listed on Schedule A and all moneys received thereon on or after the close of business on September 30, 2003, (b) the security interests in the Financed Vehicles and any accessions thereto granted by Obligors pursuant to the Receivables and any other interest of the Depositor in such Financed Vehicles; (c) any Liquidation Proceeds and any other proceeds with respect to the Receivables from claims on any physical damage, credit life or disability insurance policies covering Financed Vehicles or the related Obligors, including any vendor's single interest or other collateral protection insurance policy; (d) any property that shall have secured a Receivable and that shall have been acquired by or on behalf of the Depositor, the Servicer, or the Issuer; (e) all documents and other items contained in the Receivable Files; (f) all the Depositor's rights, but none of its obligations, under the Receivables Purchase Agreement; (g) all right, title and interest in the Trust Accounts, all funds, securities or other assets credited from time to time to the Trust Accounts and all investments therein and proceeds thereof (including all investment earnings thereon); (h) any proceeds from any Receivable repurchased by a Dealer pursuant to a Dealer Agreement; and (i) all present and future claims, demands, causes of action and choses in action in respect of any or all of the foregoing and all payments on or under and all proceeds of every kind and nature whatsoever in respect of any or all of the foregoing, including all proceeds of the conversion thereof, voluntary or involuntary, into cash or other liquid property, all cash proceeds, accounts, accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit accounts, insurance proceeds, condemnation awards, rights to payment of any and every kind and other forms of obligations and receivables, instruments and other property that at any time constitute all or part of or are included in the proceeds of any of the foregoing (collectively, the "Collateral"). The foregoing Grant is made in trust to secure the payment of principal of and interest on, and any other amounts owing in respect of, the Notes, equally and ratably without prejudice, priority or distinction, and to secure compliance with the provisions of this Indenture, all as provided in this Indenture. The Indenture Trustee, on behalf of the Holders of the Notes, acknowledges such Grant, accepts the trusts under this Indenture in accordance with the provisions of this Indenture and agrees to perform its duties required in this Indenture to the best of its ability to the end that the interests of the Holders of the Notes may be adequately and effectively protected. ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE Section 1.01. Definition. (a) Except as otherwise specified herein or as the context may otherwise require, the following terms have the respective meanings set forth below for all purposes of this Indenture. "Act" has the meaning specified in Section 11.03(a). "Administration Agreement" means the Owner Trust Administration Agreement, dated as of November 7, 2003, among the Administrator, the Issuer and the Indenture Trustee. "Administrator" means HMFC, or any successor Administrator under the Administration Agreement. "Affiliate" means, with respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person. For the purposes of this definition, "control" when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Authorized Officer" means, with respect to the Issuer, any officer of the Owner Trustee who is authorized to act for the Owner Trustee in matters relating to the Issuer and who is identified on the list of Authorized Officers delivered by the Owner Trustee to the Indenture Trustee on the Closing Date (as such list may be modified or supplemented from time to time thereafter) and, so long as the Administration Agreement is in effect, any Vice President or other senior officer of the Administrator who is authorized to act for the Administrator in matters relating to the Issuer and to be acted upon by the Administrator pursuant to the Administration Agreement and who is identified on the list of Authorized Officers delivered by the Administrator to the Indenture Trustee on the Closing Date (as such list may be modified or supplemented from time to time thereafter). "Book-Entry Notes" means a beneficial interest in the Notes, ownership and transfers of which shall be made through book entries by a Clearing Agency as described in Section 2.10. "Business Day" shall have the meaning assigned thereto in the Sale and Servicing Agreement. "Certificate of Trust" means the certificate of trust of the Issuer substantially in the form of Exhibit A to the Trust Agreement. "Class A Notes" means collectively the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes, as the context may require. 2 "Class A Principal Distributable Amount" means, with respect to any Payment Date, an amount equal to the greater of the Outstanding Amount of the Class A-1 Notes and the following: (a) the aggregate Outstanding Amount of the Class A Notes immediately prior to such Payment Date; minus (b) the lesser of: (i) an amount equal to the product of: (A) the Adjusted Pool Balance as of the last day of the related Collection Period; and (B) the sum of 63.00% and the percentage equivalent of a fraction equal to: (x) the amount on deposit in the Reserve Account after giving effect to any withdrawals but prior to giving effect to any deposits on that Payment Date; divided by (y) the Adjusted Pool Balance as of the last day of the related Collection Period; and (ii) an amount equal to the Adjusted Pool Balance as of the last day of the related Collection Period minus the Target Overcollateralization Amount for the Payment Date; provided, however, that on the Stated Maturity Date of any class of Class A Notes, the Class A Principal Distributable Amount will be at least an amount sufficient to pay that class in full; and provided further, that the Class A Principal Distributable Amount on any Payment Date will not exceed the Outstanding Amount of the Class A Notes on that Payment Date. "Class A-1 Notes" means the 1.11% Asset Backed Notes, Class A-1, substantially in the form of Exhibit A-1. "Class A-1 Rate" means 1.11% per annum, computed on the basis of the actual number of days elapsed in the related Interest Accrual Period. "Class A-2 Notes" means the 1.56% Asset Backed Notes, Class A-2, substantially in the form of Exhibit A-2. "Class A-2 Rate" means 1.56% per annum computed on the basis of a 360-day year consisting of twelve 30-day months. "Class A-3 Notes" means the 2.33% Asset Backed Notes, Class A-3, substantially in the form of Exhibit A-3. 3 "Class A-3 Rate" means 2.33% per annum, computed on the basis of a 360-day year consisting of twelve 30-day months. "Class A-4 Notes" means the 3.02% Asset Backed Notes, Class A-4, substantially in the form of Exhibit A-4. "Class A-4 Rate" means 3.02% per annum, computed on the basis of a 360-day year consisting of twelve 30-day months. "Class B Notes" means the 2.99% Asset Backed Notes, Class B, substantially in the form of Exhibit B. "Class B Principal Distributable Amount" means, with respect to any Payment Date, an amount equal to: (a) the sum of the aggregate Outstanding Amount of the Class A Notes (after taking into account the payment of the Class A Principal Distributable Amount on such Payment Date) and the aggregate Outstanding Amount of the Class B Notes immediately prior to such Payment Date; minus (b) the lesser of: (i) an amount equal to the product of: (A) the Adjusted Pool Balance as of the last day of the related Collection Period; and (B) the sum of 74.56% and the percentage equivalent of a fraction equal to: (x) the amount on deposit in the Reserve Account after giving effect to any withdrawals but prior to giving effect to any deposits on that Payment Date; divided by (y) the Adjusted Pool Balance as of the last day of the related Collection Period; and (ii) an amount equal to the Adjusted Pool Balance as of the last day of the related Collection Period minus the Target Overcollateralization Amount for the Payment Date; provided, however, that on the Stated Maturity Date of any class of Class B Notes, the Class B Principal Distributable Amount will be at least an amount sufficient to pay that class in full; and provided further, that the Class B Principal Distributable Amount on any Payment Date will not exceed the Outstanding Amount of the Class B Notes on that Payment Date. "Class B Rate" means 2.99% per annum, computed on the basis of a 360-day year consisting of twelve 30-day months. 4 "Class C Notes" means the 3.19% Asset Backed Notes, Class C, substantially in the form of Exhibit C. "Class C Principal Distributable Amount" means, with respect to any Payment Date, an amount equal to: (a) the sum of the aggregate Outstanding Amount of the Class A Notes and the Class B Notes (after taking into account the payment of the Class A Principal Distributable Amount and the Class B Principal Distributable Amount on such Payment Date) and the aggregate Outstanding Amount of the Class C Notes immediately prior to such Payment Date; minus (b) the lesser of: (i) an amount equal to the product of: (A) the Adjusted Pool Balance as of the last day of the related Collection Period; and (B) the sum of 78.03% and the percentage equivalent of a fraction equal to: (x) the amount on deposit in the Reserve Account after giving effect to any withdrawals but prior to giving effect to any deposits on that Payment Date; divided by (y) the Adjusted Pool Balance as of the last day of the related Collection Period; and (ii) an amount equal to the Adjusted Pool Balance as of the last day of the related Collection Period minus the Target Overcollateralization Amount for the Payment Date; provided, however, that on the Stated Maturity Date of any class of Class C Notes, the Class C Principal Distributable Amount will be at least an amount sufficient to pay that class in full; and provided further, that the Class C Principal Distributable Amount on any Payment Date will not exceed the Outstanding Amount of the Class C Notes on that Payment Date. "Class C Rate" means 3.19% per annum, computed on the basis of a 360-day year consisting of twelve 30-day months. "Class D Notes" means the 4.06% Asset Backed Notes, Class D, substantially in the form of Exhibit D. "Class D Principal Distributable Amount" means, with respect to any Payment Date, an amount equal to: (a) the sum of the aggregate Outstanding Amount of the Class A Notes, the Class B Notes and the Class C Notes (after taking into account the payment of the Class 5 A Principal Distributable Amount, the Class B Principal Distributable Amount and the Class C Principal Distributable Amount on such Payment Date) and the Outstanding Amount of the Class D Notes immediately prior to such Payment Date; minus (b) an amount equal to the Adjusted Pool Balance as of the last day of the related Collection Period minus the Target Overcollateralization Amount for the Payment Date; provided, however, that on the Stated Maturity Date of the Class D Notes, the Class D Principal Distributable Amount will be at least an amount sufficient to pay the Class D Notes in full; and provided further, that the Class D Principal Distributable Amount on any Payment Date will not exceed the Outstanding Amount of the Class D Notes on that Payment Date. "Class D Rate" means 4.06% per annum, computed on the basis of a 360-day year consisting of twelve 30-day months. "Clearing Agency" means an organization registered as a "clearing agency" pursuant to Section 17A of the Exchange Act. "Clearing Agency Participant" means a broker, dealer, bank, other financial institution or other Person for whom from time to time a Clearing Agency effects book-entry transfers and pledges of securities deposited with the Clearing Agency. "Closing Date" means November 7, 2003. "Code" means the Internal Revenue Code of 1986, as amended from time to time, and Treasury Regulations promulgated thereunder. "Collateral" has the meaning specified in the Granting Clause of this Indenture. "Controlling Class" means with respect to any Notes that are Outstanding, the Class A Notes (voting together as a single class) so long as any Class A Notes are Outstanding, then the Class B Notes so long as any Class B Notes are Outstanding, then the Class C Notes so long as any Class C Notes are Outstanding and thereafter the Class D Notes so long as any Class D Notes are Outstanding. "Corporate Trust Office" means the principal office of the Indenture Trustee at which at any particular time its corporate trust business is administered, which office at the date of execution of this Agreement is located at Sixth and Marquette Avenue, MAC N9311-161, Minneapolis, Minnesota 55479, Attention: Hyundai Auto Receivables Trust 2003-A, facsimile number (612) 667-3464; or at such other address as the Indenture Trustee may designate from time to time by notice to the Noteholders and the Issuer, or the principal corporate trust office of any successor Indenture Trustee at the address designated by such successor Indenture Trustee by notice to the Noteholders and the Issuer. "Default" means any occurrence that is, or with notice or the lapse of time or both would become, an Event of Default. "Definitive Notes" has the meaning specified in Section 2.10. 6 "Depositor" means Hyundai ABS Funding Corporation, a Delaware corporation, its successors and assigns. "Event of Default" has the meaning specified in Section 5.01. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Executive Officer" means, with respect to any corporation, the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, President, any Executive Vice President, any Senior Vice President, any Vice President, the Secretary, the Controller or the Treasurer of such corporation; and with respect to any partnership, any general partner thereof. "Grant" means mortgage, pledge, bargain, sell, warrant, alienate, remise, release, convey, assign, transfer, create, and grant a lien upon and a security interest in and a right of set-off against, deposit, set over and confirm pursuant to this Indenture. A Grant of the Collateral or of any other agreement or instrument shall include all rights, powers and options (but none of the obligations) of the granting party thereunder, including the immediate and continuing right to claim for, collect, receive and give receipt for principal and interest payments in respect of the Collateral and all other moneys payable thereunder, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring Proceedings in the name of the granting party or otherwise, and generally to do and receive anything that the granting party is or may be entitled to do or receive thereunder or with respect thereto. "HMFC" means Hyundai Motor Finance Company, a California corporation, and its successors. "Holder" or "Noteholder" means a Person in whose name a Note is registered on the Note Register. "Indenture Trustee" means Wells Fargo Bank Minnesota, National Association, a national banking association, not in its individual capacity, but as Indenture Trustee under this Indenture, or any successor Indenture Trustee under this Indenture. "Independent" means, when used with respect to any specified Person, that such Person (a) is in fact independent of the Issuer, any other obligor on the Notes, the Seller and any Affiliate of any of the foregoing Persons, (b) does not have any direct financial interest or any material indirect financial interest in the Issuer, any such other obligor, the Seller or any Affiliate of any of the foregoing Persons and (c) is not connected with the Issuer, any such other obligor, the Seller or any Affiliate of any of the foregoing Persons as an officer, employee, promoter, underwriter, trustee, partner, director or person performing similar functions. "Independent Certificate" means a certificate or opinion to be delivered to the Indenture Trustee under the circumstances described in, and otherwise complying with, the applicable requirements of Section 11.01, made by an Independent appraiser or other expert appointed by an Issuer Order and approved by the Indenture Trustee in the exercise of reasonable care, and such opinion or certificate shall state that the signer has read the definition of "Independent" in this Indenture and that the signer is Independent within the meaning thereof. 7 "Interest Rate" means the Class A-1 Rate, the Class A-2 Rate, the Class A-3 Rate, the Class A-4 Rate, the Class B Rate, the Class C Rate or the Class D Rate, as the context may require. "Issuer" means Hyundai Auto Receivables Trust 2003-A until a successor replaces it and, thereafter, means the successor and, for purposes of any provision contained herein and required by the TIA, each other obligor on the Notes. "Issuer Order" or "Issuer Request" means a written order or request signed in the name of the Issuer by any one of its Authorized Officers and delivered to the Indenture Trustee. "Note" means a Class A Note, a Class B Note, a Class C Note or a Class D Note as the context may require. "Note Depository Agreement" means the agreement dated November 7, 2003, among the Issuer, the Administrator, the Indenture Trustee and The Depository Trust Company, as the initial Clearing Agency, relating to the Class A Notes, the Class B Notes, the Class C Notes and the Class D Notes, substantially in the form of Exhibit E. "Note Owner" means, with respect to a Book-Entry Note, the Person who is the beneficial owner of such Book-Entry Note, as reflected on the books of the Clearing Agency or on the books of a Person maintaining an account with such Clearing Agency (directly as a Clearing Agency Participant or as an indirect participant, in each case in accordance with the rules of such Clearing Agency). "Note Register" and "Note Registrar" have the respective meanings specified in Section 2.04. "Officer's Certificate" means a certificate signed by any Authorized Officer of the Issuer, under the circumstances described in, and otherwise complying with, the applicable requirements of Section 11.01, and delivered to the Indenture Trustee. Unless otherwise specified, any reference in this Indenture to an Officer's Certificate shall be to an Officer's Certificate of any Authorized Officer of the Issuer. "Opinion of Counsel" means one or more written opinions of counsel who may, except as otherwise expressly provided in this Indenture, be an employee of or counsel to the Issuer and who shall be satisfactory to the Indenture Trustee, and which opinion or opinions shall be addressed to the Indenture Trustee, shall comply with any applicable requirements of Section 11.01 and shall be in form and substance satisfactory to the Indenture Trustee. "Outstanding" means, as of any date of determination, all Notes theretofore authenticated and delivered under this Indenture except: (i) Notes theretofore cancelled by the Note Registrar or delivered to the Note Registrar for cancellation; (ii) Notes or portions thereof the payment for which money in the necessary amount has been theretofore deposited with the Indenture Trustee or any Paying Agent in trust for the Holders of such Notes (provided, however, that 8 if such Notes are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision for such notice has been made, satisfactory to the Indenture Trustee); and (iii) Notes in exchange for or in lieu of which other Notes have been authenticated and delivered pursuant to this Indenture unless proof satisfactory to the Indenture Trustee is presented that any such Notes are held by a bona fide purchaser; provided, however, that in determining whether the Holders of the requisite Outstanding Amount of the Notes have given any request, demand, authorization, direction, notice, consent or waiver hereunder or under any Basic Document, Notes owned by the Issuer, any other obligor on the Notes, the Depositor, the Seller, the Servicer or any Affiliate of any of the foregoing Persons shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Indenture Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Notes that a Responsible Officer of the Indenture Trustee knows to be so owned shall be so disregarded. Notes so owned that have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Indenture Trustee the pledgee's right so to act with respect to such Notes and that the pledgee is not the Issuer, any other obligor on the Notes, the Depositor, the Seller, the Servicer or any Affiliate of any of the foregoing Persons. "Outstanding Amount" means, as of any date of determination and as to any Notes, the aggregate principal amount of such Notes Outstanding as of such date of determination. "Owner Trustee" means Wilmington Trust Company, not in its individual capacity but solely as Owner Trustee under the Trust Agreement, or any successor Owner Trustee under the Trust Agreement. "Paying Agent" means the Indenture Trustee or any other Person that meets the eligibility standards for the Indenture Trustee specified in Section 6.11 and is authorized by the Issuer to make payments to and distributions from the Collection Account, the Note Distribution Account and the Reserve Account, including payments of principal of or interest on the Notes on behalf of the Issuer. "Payment Date" means the 15th day of each month, or if any such date is not a Business Day, the next succeeding Business Day, commencing December 15, 2003. "Person" means any individual, corporation, estate, partnership, limited liability company, joint venture, association, joint stock company, trust or business trust (including any beneficiary thereof), unincorporated organization or government or any agency or political subdivision thereof. "Predecessor Note" means, with respect to any particular Note, every previous Note evidencing all or a portion of the same debt as that evidenced by such particular Note; and, for the purpose of this definition, any Note authenticated and delivered under Section 2.06 in lieu 9 of a mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same debt as the mutilated, lost, destroyed or stolen Note. "Proceeding" means any suit in equity, action at law or other judicial or administrative proceeding. "Record Date" means, with respect to a Payment Date or Redemption Date, the close of business on the Business Day immediately preceding such Payment Date or Redemption Date; or, if Definitive Notes have been issued, the last day of the calendar month preceding such Payment Date or Redemption Date. "Redemption Date" means, as the context requires, in the case of a redemption of the Notes pursuant to Section 10.01, the Payment Date specified by the Servicer or the Issuer pursuant to Section 10.01. "Redemption Price" means in the case of a redemption of the Notes pursuant to Section 10.01, an amount equal to the unpaid principal amount of the Notes redeemed plus accrued and unpaid interest thereon at the Interest Rate for each Note being so redeemed to but excluding the Redemption Date. "Registered Holder" means the Person in whose name a Note is registered on the Note Register on the applicable Record Date. "Responsible Officer" means, with respect to the Indenture Trustee or Owner Trustee, as applicable, any officer within the Corporate Trust Office of the Indenture Trustee or the Owner Trustee, including any Vice President, Assistant Vice President, Assistant Treasurer, Assistant Secretary or any other officer of the Indenture Trustee or the Owner Trustee customarily performing functions similar to those performed by any of the above designated officers and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer's knowledge of and familiarity with the particular subject, in each case having direct responsibility for the administration of the Basic Documents. "Sale and Servicing Agreement" means the Sale and Servicing Agreement, dated as of November 7, 2003, among the Issuer, the Depositor, HMFC, as Seller and Servicer, and the Indenture Trustee. "Schedule of Receivables" means the list of Receivables set forth in Schedule A (which Schedule may be in the form of microfiche). "Securities Act" means the Securities Act of 1933, as amended. "Seller" means HMFC in its capacity as seller under the Receivables Purchase Agreement and the Sale and Servicing Agreement, and its successor in interest. "Servicer" means HMFC, in its capacity as servicer under the Sale and Servicing Agreement, and any Successor Servicer thereunder. "State" means any one of the 50 states of the United States of America, or the District of Columbia. 10 "Successor Servicer" has the meaning specified in Section 3.07(f). "Trust Accounts" has the meaning set forth in the Sale and Servicing Agreement. "Trust Estate" means all money, instruments, rights and other property that are subject or intended to be subject to the lien and security interest of this Indenture for the benefit of the Noteholders (including, without limitation, all property and interests Granted to the Indenture Trustee), including all proceeds thereof. "Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 as in force on the date hereof, unless otherwise specifically provided. "UCC" means, unless the context otherwise requires, the Uniform Commercial Code as in effect in the relevant jurisdiction, as amended from time to time. (b) Except as otherwise specified herein or as the context may otherwise require, capitalized terms used herein but not otherwise defined shall have the meanings ascribed thereto in the Sale and Servicing Agreement. Section 1.02. Rules of Construction. Unless the context otherwise requires: (i) a term has the meaning assigned to it; (ii) an accounting term not otherwise defined has the meaning assigned to it in accordance with generally accepted accounting principles as in effect from time to time; (iii) "or" is not exclusive; (iv) "including" means including without limitation; (v) definitions are applicable to the singular and plural forms of such terms and to the masculine, feminine and neuter genders of such terms; and (vi) any agreement, instrument or statute defined or referred to herein or in any instrument or certificate delivered in connection herewith means such agreement, instrument or statute as from time to time amended, modified or supplemented and includes (in the case of agreements or instruments) references to all attachments thereto and instruments incorporated therein; references to a Person are also to its permitted successors and assigns. Section 1.03. Incorporation by Reference of Trust Indenture Act. Whenever this Indenture refers to a provision of the TIA, such provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings: "Commission" means the Securities and Exchange Commission. "indenture securities" means the Notes. 11 "indenture security holder" means a Noteholder. "indenture to be qualified" means this Indenture. "indenture trustee" or "institutional trustee" means the Indenture Trustee. "obligor" on the indenture securities means the Issuer and any other obligor on the indenture securities. All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by Commission rule have the meaning assigned to them by such definitions. ARTICLE II. THE NOTES Section 2.01. Form. The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes, the Class B Notes, the Class C Notes and the Class D Notes, in each case together with the Indenture Trustee's certificate of authentication, shall be in substantially the form set forth in Exhibit A-1, Exhibit A-2, Exhibit A-3, Exhibit A-4, Exhibit B, Exhibit C and Exhibit D, respectively, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may, consistently herewith, be determined by the officers executing the Notes, as evidenced by their execution of the Notes. Any portion of the text of any Note may be set forth on the reverse thereof, with an appropriate reference thereto on the face of such Note. The Definitive Notes shall be typewritten, printed, lithographed or engraved or produced by any combination of these methods (with or without steel engraved borders), all as determined by the officers executing such Notes, as evidenced by their execution of such Notes. Each Note shall be dated the date of its authentication. The terms of the Notes set forth in Exhibit A-1, Exhibit A-2, Exhibit A-3, Exhibit A-4, Exhibit B, Exhibit C and Exhibit D are part of the terms of this Indenture. Section 2.02. Execution, Authentication and Delivery. The Notes shall be executed on behalf of the Issuer by any of its Authorized Officers. The signature of any such Authorized Officer on the Notes may be manual or facsimile. Notes bearing the manual or facsimile signature of individuals who were at any time Authorized Officers of the Issuer shall bind the Issuer, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Notes or did not hold such offices at the date of such Notes. The Indenture Trustee shall upon Issuer Order authenticate and deliver Class A-1 Notes for original issue in an aggregate principal amount of $170,000,000, Class A-2 Notes for original issue in an aggregate principal amount of $241,000,000, Class A-3 Notes for original issue in an aggregate principal amount of $130,000,000, Class A-4 Notes for original issue in an 12 aggregate principal amount of $120,618,000, Class B Notes for original issue in an aggregate principal amount of $39,034,000, Class C Notes for original issue in an aggregate principal amount of $11,710,000, and Class D Notes for original issue in an aggregate principal amount $40,985,000. The aggregate principal amount of Class A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes, Class B Notes, Class C Notes and Class D Notes outstanding at any time may not exceed such respective amounts except as provided in Section 2.06. The Notes shall be issuable as registered Notes in minimum denominations of $1,000 and in integral multiples of $1,000 in excess thereof (except for one Note of each class which may be issued in a denomination other than an integral multiple of $1,000). No Note shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose, unless there appears on such Note a certificate of authentication substantially in the form provided for herein executed by the Indenture Trustee by the manual signature of one of its authorized signatories, and such certificate upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered hereunder. Section 2.03. Temporary Notes. Pending the preparation of Definitive Notes, the Issuer may execute, and upon receipt of an Issuer Order the Indenture Trustee shall authenticate and deliver, temporary Notes that are printed, lithographed, typewritten, mimeographed or otherwise produced, of the tenor of the Definitive Notes in lieu of which they are issued and with such variations not inconsistent with the terms of this Indenture as the officers executing such Notes may determine, as evidenced by their execution of such Notes. If temporary Notes are issued, the Issuer shall cause Definitive Notes to be prepared without unreasonable delay. After the preparation of Definitive Notes, the temporary Notes shall be exchangeable for Definitive Notes upon surrender of the temporary Notes at the office or agency of the Issuer to be maintained as provided in Section 3.02, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Notes, the Issuer shall execute, and the Indenture Trustee shall authenticate and deliver in exchange therefor, a like principal amount of Definitive Notes of authorized denominations. Until so exchanged, the temporary Notes shall in all respects be entitled to the same benefits under this Indenture as Definitive Notes. Section 2.04. Registration; Registration of Transfer and Exchange. The Issuer shall cause to be kept a register (the "Note Register") in which, subject to such reasonable regulations as it may prescribe, the Note Registrar shall provide for the registration of Notes and the registration of transfers of Notes. The Indenture Trustee initially shall be the "Note Registrar" for the purpose of registering Notes and transfers of Notes as herein provided. Upon any resignation of any Note Registrar, the Issuer shall promptly appoint a successor or, if it elects not to make such an appointment, assume the duties of Note Registrar. If a Person other than the Indenture Trustee is appointed by the Issuer as Note Registrar, the Issuer will give the Indenture Trustee prompt written notice of the appointment of such Note Registrar and of the location, and any change in the location, of the Note Register, and the Indenture Trustee shall have the right to inspect the Note Register at all reasonable times and to obtain copies thereof, and the Indenture Trustee shall have the right to conclusively rely upon a certificate executed on behalf of the Note 13 Registrar by an Executive Officer thereof as to the names and addresses of the Holders of the Notes and the principal amounts and number of such Notes. Upon surrender for registration of transfer of any Note at the office or agency of the Issuer to be maintained as provided in Section 3.02, if the requirements of Section 8-401(1) of the UCC are met, the Issuer shall execute, and the Indenture Trustee shall authenticate and the Noteholder shall obtain from the Indenture Trustee, in the name of the designated transferee or transferees, one or more new Notes of the same Class in any authorized denominations, of a like aggregate principal amount. At the option of the Holder, Notes may be exchanged for other Notes of the same Class in any authorized denominations, of a like aggregate principal amount, upon surrender of the Notes to be exchanged at such office or agency. Whenever any Notes are so surrendered for exchange, if the requirements of Section 8-401(1) of the UCC are met, the Issuer shall execute, and the Indenture Trustee, without having to verify that the requirements of Section 8-401(1) have been met, shall authenticate and the Noteholder shall obtain from the Indenture Trustee, the Notes that the Noteholder making the exchange is entitled to receive. All Notes issued upon any registration of transfer or exchange of Notes shall be the valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Notes surrendered upon such registration of transfer or exchange. Every Note presented or surrendered for registration of transfer or exchange shall be duly endorsed by, or be accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by, the Holder thereof or such Holder's attorney duly authorized in writing, with such signature guaranteed by an "eligible guarantor institution" meeting the requirements of the Note Registrar, which requirements include membership or participation in the Securities Transfer Agent's Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Exchange Act. No service charge shall be made to a Holder for any registration of transfer or exchange of Notes, but the Issuer may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Notes, other than exchanges pursuant to Section 2.03 or 9.05 not involving any transfer. The preceding provisions of this Section notwithstanding, the Issuer shall not be required to make and the Note Registrar need not register transfers or exchanges of Notes selected for redemption or of any Note for a period of 15 days preceding the due date for any payment with respect to the Note. No Note, or any interest therein, may be transferred to an "employee benefit plan" within the meaning of Section 3(3) of ERISA that is subject to ERISA, a "plan" described in Section 4975(e)(1) of the Code, any entity that is deemed to hold "plan assets" of any of the foregoing by reason of an employee benefit plan's or other plan's investment in such entity, or any governmental, foreign or church plan subject to applicable law that is substantially similar to the fiduciary responsibility provisions of ERISA or Section 4975 of the Code, unless such transferee represents, warrants and covenants that its purchase and holding of such note, 14 throughout the period that it holds such note, is and will be, covered by Department of Labor prohibited transaction class exemption ("PTE") 90-1; PTE 96-23; PTE 95-60; PTE 91-38; PTE 84-14 or another applicable prohibited transaction exemption (or in the case of a governmental, foreign or church plan, subject to law that is substantially similar to ERISA or Section 4975 of the Code, a similar type of exemption or other applicable relief). By its acquisition of a Note in book-entry form or any interest therein, each transferee will be deemed to have represented, warranted and covenanted that it satisfies the foregoing requirements and the Indenture Trustee may rely conclusively on the same for purposes hereof. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the transfer of Notes. Section 2.05. [Reserved]. Section 2.06. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, and (ii) there is delivered to the Indenture Trustee such security or indemnity as may be required by it to hold the Issuer and the Indenture Trustee harmless, then, in the absence of notice to the Issuer, the Note Registrar or the Indenture Trustee that such Note has been acquired by a bona fide purchaser, and provided that the requirements of Section 8-405 of the UCC are met, the Issuer shall execute, and upon an Issuer Order the Indenture Trustee shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a replacement Note of the same Class; provided, however, that if any such destroyed, lost or stolen Note, but not a mutilated Note, shall have become or within 15 days shall be due and payable, or shall have been called for redemption, instead of issuing a replacement Note, the Issuer may pay such destroyed, lost or stolen Note when so due or payable or upon the Redemption Date without surrender thereof. If, after the delivery of such replacement Note or payment of a destroyed, lost or stolen Note, a bona fide purchaser of the original Note in lieu of which such replacement Note was issued presents for payment such original Note, the Issuer and the Indenture Trustee shall be entitled to recover such replacement Note (or such payment) from the Person to whom it was delivered or any Person taking such replacement Note from such Person to whom such replacement Note was delivered or any assignee of such Person, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the Issuer or the Indenture Trustee in connection therewith. Upon the issuance of any replacement Note under this Section, the Issuer may require the payment by the Holder of such Note of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other reasonable expenses (including the fees and expenses of the Indenture Trustee) connected therewith. Every replacement Note issued pursuant to this Section in replacement of any mutilated, destroyed, lost or stolen Note shall constitute an original additional contractual obligation of the Issuer, whether or not the mutilated, destroyed, lost or stolen Note shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Notes duly issued hereunder. 15 The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes. Section 2.07. Persons Deemed Owners. Prior to due presentment for registration of transfer of any Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name any Note is registered (as of the day of determination) as the owner of such Note for the purpose of receiving payments of principal of and interest, if any, on such Note and for all other purposes whatsoever, whether or not such Note be overdue, and none of the Issuer, the Indenture Trustee or any agent of the Issuer or the Indenture Trustee shall be affected by notice to the contrary. Section 2.08. Payment of Principal and Interest; Defaulted Interest. (a) The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes, the Class B Notes, the Class C Notes and the Class D Notes shall accrue interest at the Class A-1 Rate, the Class A-2 Rate, the Class A-3 Rate, the Class A-4 Rate, the Class B Rate, the Class C Rate and the Class D Rate, respectively, as set forth in Exhibit A-1, Exhibit A-2, Exhibit A-3, Exhibit A-4, Exhibit B, Exhibit C and Exhibit D, respectively, and such interest shall be payable on each Payment Date as specified therein, subject to Section 3.01. Any installment of interest or principal payable on a Note that is punctually paid or duly provided for by the Issuer on the applicable Payment Date shall be paid to the Person in whose name such Note (or one or more Predecessor Notes) is registered on the Record Date by check mailed first-class postage prepaid to such Person's address as it appears on the Note Register on such Record Date, except that, unless Definitive Notes have been issued pursuant to Section 2.12, with respect to Notes registered on the Record Date in the name of the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.), payment shall be made by wire transfer in immediately available funds to the account designated by such nominee; provided, however, that the final installment of principal payable with respect to such Note on a Payment Date or on the related Stated Maturity Date (including the Redemption Price for any Note called for redemption pursuant to Section 10.01) shall be payable as provided in paragraph (b) below. The funds represented by any such checks returned undelivered shall be held in accordance with Section 3.03. (b) The principal of each Note shall be payable in installments on each Payment Date as provided in Section 3.01 hereof and the forms of the Notes set forth in Exhibit A-1, Exhibit A-2, Exhibit A-3, Exhibit A-4, Exhibit B, Exhibit C and Exhibit D. Notwithstanding the foregoing, the entire unpaid principal amount of the Notes may be declared immediately due and payable, if not previously paid, in the manner provided in Section 5.02 on any date on which an Event of Default shall have occurred and be continuing, by the Indenture Trustee or the Indenture Trustee acting at the direction of the Holders of Notes representing not less than a majority of the Outstanding Amount of the Controlling Class. All principal payments on each Class of Notes shall be made pro rata to the Noteholders of the related Class entitled thereto. Upon written notice thereof, the Indenture Trustee shall notify the Person in whose name a Note is registered at the close of business on the Record Date preceding the Payment Date on which the Issuer expects the final installment of principal of and interest on such Note to be paid. Such notice shall specify that such final installment will be payable only upon presentation and surrender of such Note and shall specify the place where such Note may be 16 presented and surrendered for payment of such installment. Notices in connection with redemptions of Notes shall be mailed to Noteholders as provided in Section 10.02. (c) If the Issuer defaults in a payment of interest on the Notes, the Issuer shall pay defaulted interest (plus interest on such defaulted interest to the extent lawful) at the applicable Interest Rate in any lawful manner on the next Payment Date. Section 2.09. Cancellation. All Notes surrendered for payment, registration of transfer, exchange or redemption shall, if surrendered to any Person other than the Indenture Trustee, be delivered to the Indenture Trustee and shall be promptly cancelled by the Indenture Trustee. The Issuer may at any time deliver to the Indenture Trustee for cancellation any Notes previously authenticated and delivered hereunder that the Issuer may have acquired in any manner whatsoever, and all Notes so delivered shall be promptly cancelled by the Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange for any Notes cancelled as provided in this Section, except as expressly permitted by this Indenture. All cancelled Notes may be held or disposed of by the Indenture Trustee in accordance with its standard retention or disposal policy as in effect at the time unless the Issuer shall direct by an Issuer Order that they be destroyed or returned to it; provided, that such Issuer Order is timely and the Notes have not been previously disposed of by the Indenture Trustee. Section 2.10. Book-Entry Notes. The Notes, upon original issuance, will be issued in the form of typewritten Notes representing the Book-Entry Notes, to be delivered to The Depository Trust Company, the initial Clearing Agency, by, or on behalf of, the Issuer. The Book-Entry Notes shall be registered initially on the Note Register in the name of Cede & Co., the nominee of the initial Clearing Agency, and no Owner thereof will receive a Definitive Note representing such Note Owner's interest in such Note, except as provided in Section 2.12. Unless and until definitive, fully registered Notes (the "Definitive Notes") have been issued to such Note Owners pursuant to Section 2.12: (i) the provisions of this Section shall be in full force and effect; (ii) the Note Registrar and the Indenture Trustee shall be entitled to deal with the Clearing Agency for all purposes of this Indenture (including the payment of principal of and interest on the Notes and the giving of instructions or directions hereunder) as the sole holder of the Notes, and shall have no obligation to the Note Owners; (iii) to the extent that the provisions of this Section conflict with any other provisions of this Indenture, the provisions of this Section shall control; (iv) the rights of Note Owners shall be exercised only through the Clearing Agency and shall be limited to those established by law and agreements between such Note Owners and the Clearing Agency or the Clearing Agency Participants pursuant to the Note Depository Agreement. Unless and until Definitive Notes are issued pursuant to Section 2.12, the initial Clearing Agency will make book-entry transfers among the Clearing Agency Participants and receive and transmit payments of principal of and interest on the Notes to such Clearing Agency Participants; and 17 (v) whenever this Indenture requires or permits actions to be taken based upon instructions or directions of Holders of Notes evidencing a specified percentage of the Outstanding Amount of the Controlling Class of Notes, the Clearing Agency shall be deemed to represent such percentage only to the extent that it has received instructions to such effect from Note Owners or Clearing Agency Participants owning or representing, respectively, such required percentage of the beneficial interest in the Notes and has delivered such instructions to the Indenture Trustee. Section 2.11. Notices to Clearing Agency. Whenever a notice or other communication to the Noteholders is required under this Indenture, unless and until Definitive Notes shall have been issued to such Note Owners pursuant to Section 2.12, the Indenture Trustee shall give all such notices and communications specified herein to be given to Holders of the Notes to the Clearing Agency, and shall have no obligation to such Note Owners. Section 2.12. Definitive Notes. If (i) the Administrator advises the Indenture Trustee in writing that the Clearing Agency is no longer willing or able to properly discharge its responsibilities with respect to the Book-Entry Notes and the Administrator is unable to locate a qualified successor or (ii) after the occurrence of an Event of Default or a Servicer Termination Event, Owners of the Book-Entry Notes representing beneficial interests aggregating at least a majority of the Outstanding Amount of such Notes advise the Clearing Agency in writing that the continuation of a book-entry system through the Clearing Agency is no longer in the best interests of such Note Owners, then the Clearing Agency shall notify all Note Owners, the Administrator and the Indenture Trustee of the occurrence of any such event and of the availability of Definitive Notes to Note Owners requesting the same. Upon surrender to the Indenture Trustee of the typewritten Notes representing the Book-Entry Notes by the Clearing Agency, accompanied by registration instructions, the Issuer shall execute and the Indenture Trustee upon an Issuer Order shall authenticate the Definitive Notes in accordance with the written instructions of the Clearing Agency. None of the Issuer, the Note Registrar, the Administrator or the Indenture Trustee shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be protected in relying on, such instructions. Upon the issuance of Definitive Notes, the Indenture Trustee shall recognize the Holders of the Definitive Notes as Noteholders. Section 2.13. Tax Treatment. The Issuer has entered into this Indenture, and the Notes will be issued, with the intention that, for purposes of federal and state income tax, franchise tax and any other tax measured in whole or in part by income, the Notes will be characterized as indebtedness secured by the Trust Estate. The Issuer, by entering into this Indenture, and each Noteholder, by its acceptance of a Note (and each Note Owner by its acceptance of an interest in the applicable Book-Entry Note), agree to treat the Notes for such purposes as indebtedness. ARTICLE III. COVENANTS Section 3.01. Payment of Principal and Interest. The Issuer will duly and punctually pay the principal of and interest, if any, on the Notes in accordance with the terms of 18 the Notes and this Indenture. Without limiting the foregoing, subject to Section 8.02(c), on each Payment Date, the Issuer will cause to be distributed all amounts deposited pursuant to the Sale and Servicing Agreement into the Note Distribution Account (i) for the benefit of the Class A-1 Notes, to the Class A-1 Noteholders, (ii) for the benefit of the Class A-2 Notes, to the Class A-2 Noteholders, (iii) for the benefit of the Class A-3 Notes, to the Class A-3 Noteholders, (iv) for the benefit of the Class A-4 Notes, to the Class A-4 Noteholders, (v) for the benefit of the Class B Notes, to the Class B Noteholders, (vi) for the benefit of the Class C Notes, to the Class C Noteholders and (vii) for the benefit of the Class D Notes to the Class D Noteholders. Amounts properly withheld under the Code by any Person from a payment to any Noteholder of interest and/or principal shall be considered as having been paid by the Issuer to such Noteholder for all purposes of this Indenture. Section 3.02. Maintenance of Office or Agency. The Issuer will maintain in the Borough of Manhattan, The City of New York, an office or agency where Notes may be surrendered for registration of transfer or exchange, and where notices and demands to or upon the Issuer in respect of the Notes and this Indenture may be served. Such office will initially be located at 55 Water Street, Attention: Hyundai Auto Receivables Trust 2003-A, New York, New York 10041. The Issuer will give prompt written notice to the Indenture Trustee of the location, and of any change in the location, of any such office or agency. If at any time the Issuer shall fail to maintain any such office or agency or shall fail to furnish the Indenture Trustee with the address thereof, such surrenders, notices and demands may be made or served at the Corporate Trust Office, and the Issuer hereby appoints the Indenture Trustee as its agent to receive all such surrenders, notices and demands. Section 3.03. Money for Payments To Be Held in Trust. All payments of amounts due and payable with respect to any Notes that are to be made from amounts withdrawn from the Collection Account, the Note Distribution Account and the Reserve Account shall be made on behalf of the Issuer by the Indenture Trustee or by another Paying Agent, and no amounts so withdrawn from the Collection Account, the Note Distribution Account or the Reserve Account for payments of Notes shall be paid over to the Issuer except as provided in this Section. On or before the Business Day preceding each Payment Date and Redemption Date, the Issuer shall deposit or cause to be deposited in the Note Distribution Account an aggregate sum sufficient to pay the amounts then becoming due under the Notes, such sum to be held in trust for the benefit of the Persons entitled thereto, and (unless the Paying Agent is the Indenture Trustee) shall promptly notify the Indenture Trustee of its action or failure so to act. The Issuer will cause each Paying Agent other than the Indenture Trustee to execute and deliver to the Indenture Trustee an instrument in which such Paying Agent shall agree with the Indenture Trustee (and if the Indenture Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions of this Section, that such Paying Agent will: (i) hold all sums held by it for the payment of amounts due with respect to the Notes in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided and pay such sums to such Persons as herein provided; 19 (ii) give the Indenture Trustee notice of any default by the Issuer (or any other obligor on the Notes) of which it has actual knowledge in the making of any payment required to be made with respect to the Notes; (iii) at any time during the continuance of any such default, upon the written request of the Indenture Trustee, forthwith pay to the Indenture Trustee all sums so held in trust by such Paying Agent; (iv) immediately resign as a Paying Agent and forthwith pay to the Indenture Trustee all sums held by it in trust for the payment of Notes if at any time it ceases to meet the standards required to be met by a Paying Agent at the time of its appointment; and (v) comply with all requirements of the Code with respect to the withholding from any payments made by it on any Notes of any applicable withholding taxes imposed thereon (including retaining any Internal Revenue Service forms or certifications establishing exemption therefrom as required by law) and with respect to any applicable reporting requirements in connection with any payments made by it on any Notes and any withholding of taxes therefrom. The Issuer may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, by Issuer Order direct any Paying Agent to pay to the Indenture Trustee all sums held in trust by such Paying Agent, such sums to be held by the Indenture Trustee upon the same trusts as those upon which the sums were held by such Paying Agent; and upon such payment by any Paying Agent to the Indenture Trustee, such Paying Agent shall be released from all further liability with respect to such money. Subject to applicable laws with respect to escheat of funds, any money held by the Indenture Trustee or any Paying Agent in trust for the payment of any amount due with respect to any Note and remaining unclaimed for two years after such amount has become due and payable shall be discharged from such trust and be paid upon Issuer Request to the Issuer; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Issuer for payment thereof (but only to the extent of the amounts so paid to the Issuer), and all liability of the Indenture Trustee or such Paying Agent with respect to such trust money shall thereupon cease; provided, however, that the Indenture Trustee or such Paying Agent, before being required to make any such repayment, shall at the expense and direction of the Issuer cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in The City of New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Issuer. The Indenture Trustee shall also adopt and employ, at the expense and direction of the Issuer, any other reasonable means of notification of such repayment (including, but not limited to, mailing notice of such repayment to Holders whose Notes have been called but have not been surrendered for redemption or whose right to or interest in moneys due and payable but not claimed is determinable from the records of the Indenture Trustee or of any Paying Agent, at the last address of record for each such Holder). 20 Section 3.04. Existence. Except as otherwise permitted by the provisions of Section 3.10, the Issuer will keep in full effect its existence, rights and franchises as a statutory trust under the laws of the State of Delaware (unless it becomes, or any successor Issuer hereunder is or becomes, organized under the laws of any other State or of the United States of America, in which case the Issuer will keep in full effect its existence, rights and franchises under the laws of such other jurisdiction) and will obtain and preserve its qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Indenture, the Notes, the Collateral and each other instrument or agreement included in the Trust Estate. Section 3.05. Protection of Trust Estate. The Issuer will from time to time execute and deliver all such supplements and amendments hereto and all such financing statements, continuation statements, instruments of further assurance and other instruments, and will take such other action necessary or advisable to: (i) maintain or preserve the lien and security interest (and the priority thereof) of this Indenture or carry out more effectively the purposes hereof; (ii) perfect, publish notice of or protect the validity of any Grant made or to be made by this Indenture; (iii) enforce any of the Collateral; or (iv) preserve and defend title to the Trust Estate and the rights of the Indenture Trustee and the Noteholders in such Trust Estate against the claims of all persons and parties. The Issuer hereby designates the Indenture Trustee, as its agent and attorney-in-fact, to execute upon an Issuer Order any financing statement, continuation statement or other instrument required to be executed pursuant to this Section 3.05. Section 3.06. Opinions as to Trust Estate. (a) On the Closing Date, the Issuer shall cause to be furnished to the Indenture Trustee an Opinion of Counsel either stating that, in the opinion of such counsel, such action has been taken with respect to the recording and filing of this Indenture, any indentures supplemental hereto, and any other requisite documents, and with respect to the filing of any financing statements and continuation statements, as are necessary to perfect and make effective the lien and security interest of this Indenture and reciting the details of such action, or stating that, in the opinion of such counsel, no such action is necessary to make such lien and security interest effective. (b) On or before April 30 in each calendar year, beginning in 2004, the Issuer shall furnish to the Indenture Trustee and the Rating Agencies an Opinion of Counsel either stating that, in the opinion of such counsel, such action has been taken with respect to the recording, filing, re-recording and re-filing of this Indenture, any indentures supplemental hereto and any other requisite documents and with respect to the execution and filing of any financing statements and continuation statements as is necessary to maintain the lien and security interest created by this Indenture and reciting the details of such action, or stating that in the opinion of 21 such counsel no such action is necessary to maintain such lien and security interest. Such Opinion of Counsel shall also describe the recording, filing, re-recording and refiling of this Indenture, any indentures supplemental hereto and any other requisite documents and the execution and filing of any financing statements and continuation statements that will, in the opinion of such counsel, be required to maintain the lien and security interest of this Indenture until April 30 in the following calendar year. Section 3.07. Performance of Obligations; Servicing of Receivables. (a) The Issuer will not take any action and will use its reasonable best efforts not to permit any action to be taken by others that would release any Person from any of such Person's material covenants or obligations under any instrument or agreement included in the Trust Estate or that would result in the amendment, hypothecation, subordination, termination or discharge of, or impair the validity or effectiveness of, any such instrument or agreement, except as expressly provided in this Indenture, the Sale and Servicing Agreement or such other instrument or agreement. (b) The Issuer may contract with other Persons with notification to the Rating Agencies to assist it in performing its duties under this Indenture, and any performance of such duties by a Person identified to the Indenture Trustee in an Officer's Certificate of the Issuer shall be deemed to be action taken by the Issuer. Initially, the Issuer has contracted with the Servicer and the Administrator to assist the Issuer in performing its duties under this Indenture. (c) The Issuer will punctually perform and observe all of its obligations and agreements contained in this Indenture, the Basic Documents and in the instruments and agreements included in the Trust Estate, including but not limited to filing or causing to be filed all UCC financing statements and continuation statements required to be filed by the terms of this Indenture and the Sale and Servicing Agreement in accordance with and within the time periods provided for herein and therein. Except as otherwise expressly provided therein, the Issuer shall not waive, amend, modify, supplement or terminate any Basic Document or any provision thereof without the consent of either the Indenture Trustee or the Holders of at least a majority of the Outstanding Amount of the Notes. (d) If the Issuer shall have knowledge of the occurrence of a Servicer Termination Event under the Sale and Servicing Agreement, the Issuer shall promptly notify the Indenture Trustee and the Rating Agencies thereof, and shall specify in such notice the action, if any, the Issuer is taking with respect to such default. (e) [Reserved] (f) Upon any termination of the Servicer's rights and powers pursuant to the Sale and Servicing Agreement, the Issuer shall promptly notify the Indenture Trustee thereof. As soon as a successor servicer (a "Successor Servicer") is appointed, the Issuer shall notify the Indenture Trustee in writing of such appointment, specifying in such notice the name and address of such Successor Servicer. (g) Without limitation of the absolute nature of the assignment granted to the Indenture Trustee under this Indenture or the rights of the Indenture Trustee hereunder, the Issuer agrees (i) except to the extent otherwise provided in any Basic Documents, that it will not, without the prior written consent of either the Indenture Trustee acting at the direction of the 22 Holders of at least a majority in Outstanding Amount of the Notes, amend, modify, waive, supplement, terminate or surrender, or agree to any amendment, modification, supplement, termination, waiver or surrender of, the terms of any Collateral (except to the extent otherwise provided in the Sale and Servicing Agreement) or the Basic Documents, or waive timely performance or observance by the Servicer or the Seller under the Sale and Servicing Agreement; and (ii) that any such amendment shall not (A) increase or reduce in any manner the amount of, or accelerate or delay the timing of, distributions that are required to be made for the benefit of the Noteholders or (B) reduce the aforesaid percentage of the Notes that is required to consent to any such amendment, without the consent of the Holders of all Outstanding Notes. If the Indenture Trustee acting at the direction of such Holders agrees to any such amendment, modification, supplement or waiver, the Indenture Trustee agrees, promptly following a request by the Issuer to do so, to execute and deliver, at the Issuer's own expense, such agreements, instruments, consents and other documents as the Issuer may deem necessary or appropriate in the circumstances. Section 3.08. Negative Covenants. So long as any Notes are Outstanding, the Issuer shall not: (i) except to the extent as expressly permitted by this Indenture or the Sale and Servicing Agreement, sell, transfer, exchange or otherwise dispose of any of the properties or assets of the Issuer, including those included in the Trust Estate, unless directed to do so by the Indenture Trustee acting on direction of at least a majority in Outstanding Amount of the Controlling Class given pursuant to this Agreement; (ii) claim any credit on, or make any deduction from the principal or interest payable in respect of, the Notes (other than amounts properly withheld from such payments under the Code) or assert any claim against any present or former Noteholder by reason of the payment of the taxes levied or assessed upon any part of the Trust Estate; or (iii) (A) permit the validity or effectiveness of this Indenture to be impaired, or permit the lien of this Indenture to be amended, hypothecated, subordinated, terminated or discharged, or permit any Person to be released from any covenants or obligations with respect to the Notes under this Indenture except as may be expressly permitted hereby, (B) permit any lien, charge, excise, claim, security interest, mortgage or other encumbrance (other than the lien of this Indenture) to be created on or extend to or otherwise arise upon or burden the Trust Estate or any part thereof or any interest therein or the proceeds thereof (other than tax liens, mechanics' liens and other liens that arise by operation of law, in each case on any of the Financed Vehicles and arising solely as a result of an action or omission of the related Obligor) or (C) permit the lien of this Indenture not to constitute a valid first priority (other than with respect to any such tax, mechanics' or other lien) security interest in the Trust Estate. Section 3.09. Annual Statement as to Compliance. The Issuer will deliver to the Indenture Trustee and the Rating Agencies, within 120 days after the end of each fiscal year of 23 the Issuer (commencing with the fiscal year 2003), an Officer's Certificate stating, as to the Authorized Officer signing such Officer's Certificate, that: (i) a review of the activities of the Issuer during such year and of its performance under this Indenture has been made under such Authorized Officer's supervision; and (ii) to the best of such Authorized Officer's knowledge, based on such review, the Issuer has complied with all conditions and covenants under this Indenture throughout such year or, if there has been a default in its compliance with any such condition or covenant, specifying each such default known to such Authorized Officer and the nature and status thereof. Section 3.10. Issuer May Consolidate, etc., Only on Certain Terms. (a) The Issuer shall not consolidate or merge with or into any other Person, unless: (i) the Person (if other than the Issuer) formed by or surviving such consolidation or merger shall be a Person organized and existing under the laws of the United States of America or any State and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Indenture Trustee, in form satisfactory to the Indenture Trustee, the due and punctual payment of the principal of and interest on all Notes and the performance or observance of every agreement and covenant of this Indenture on the part of the Issuer to be performed or observed, all as provided herein; (ii) immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing; (iii) the Rating Agency Condition shall have been satisfied with respect to such transaction; (iv) the Issuer shall have received an Opinion of Counsel (and shall have delivered copies thereof to the Indenture Trustee) to the effect that such transaction will not have any material adverse federal income tax consequences to the Issuer, any Noteholder or any Certificateholder; (v) any action that is necessary to maintain the lien and security interest created by this Indenture shall have been taken; and (vi) the Issuer shall have delivered to the Indenture Trustee an Officer's Certificate and an Opinion of Counsel each stating that such consolidation or merger and such supplemental indenture comply with this Article III and that all conditions precedent herein provided for relating to such transaction have been complied with (including any filing required by the Exchange Act) in all material respects. 24 (b) The Issuer shall not convey or transfer any of its properties or assets, including those included in the Trust Estate, to any Person, unless: (i) the Person that acquires by conveyance or transfer the properties and assets of the Issuer the conveyance or transfer of which is hereby restricted (A) shall be a United States citizen or a Person organized and existing under the laws of the United States of America or any State, (B) expressly assumes, by an indenture supplemental hereto, executed and delivered to the Indenture Trustee, in form satisfactory to the Indenture Trustee, the due and punctual payment of the principal of and interest on all Notes and the performance or observance of every agreement and covenant of this Indenture on the part of the Issuer to be performed or observed, all as provided herein, (C) expressly agrees by means of such supplemental indenture that all right, title and interest so conveyed or transferred shall be subject and subordinate to the rights of Holders of the Notes, (D) unless otherwise provided in such supplemental indenture, expressly agrees to indemnify, defend and hold harmless the Issuer and the Indenture Trustee against and from any loss, liability or expense arising under or related to this Indenture and the Notes and (E) expressly agrees by means of such supplemental indenture that such Person (or, if a group of Persons, one specified Person) shall make all filings with the Commission (and any other appropriate Person) required by the Exchange Act in connection with the Notes; (ii) immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing; (iii) the Rating Agency Condition shall have been satisfied with respect to such transaction; (iv) the Issuer shall have received an Opinion of Counsel which may not be in-house counsel (and shall have delivered copies thereof to the Indenture Trustee) to the effect that such transaction will not have any material adverse federal income tax consequences to the Issuer, any Noteholder or any Certificateholder; (v) any action that is necessary to maintain the lien and security interest created by this Indenture shall have been taken; and (vi) the Issuer shall have delivered to the Indenture Trustee an Officer's Certificate and an Opinion of Counsel each stating that such conveyance or transfer and such supplemental indenture comply with this Article III and that all conditions precedent herein provided for relating to such transaction have been complied with (including any filing required by the Exchange Act) in all material respects. Section 3.11. Successor or Transferee. (a) Upon any consolidation or merger of the Issuer in accordance with Section 3.10(a), the Person formed by or surviving such 25 consolidation or merger (if other than the Issuer) shall succeed to, and be substituted for, and may exercise every right and power of, the Issuer under this Indenture with the same effect as if such Person had been named as the Issuer herein. (b) Upon a conveyance or transfer of all the assets and properties of the Issuer pursuant to Section 3.10(b), Hyundai Auto Receivables Trust 2003-A will be released from every covenant and agreement of this Indenture to be observed by or performed on the part of the Issuer with respect to the Notes immediately upon the delivery of written notice to the Indenture Trustee stating that Hyundai Auto Receivables Trust 2003-A is to be so released. Section 3.12. No Other Business. The Issuer shall not engage in any business other than financing, purchasing, owning, selling and managing the Receivables in the manner contemplated by this Indenture and the Basic Documents and any activities incidental thereto. Section 3.13. No Borrowing. The Issuer shall not issue, incur, assume, guarantee or otherwise become liable, directly or indirectly, for any indebtedness except for the Notes. Section 3.14. Servicer's Obligations. The Issuer shall cause the Servicer to comply with Sections 4.09, 4.10, 4.11 and Article VII of the Sale and Servicing Agreement. Section 3.15. Guarantees, Loans, Advances and Other Liabilities. Except as contemplated by the Trust Agreement, the Sale and Servicing Agreement or this Indenture, the Issuer shall not make any loan or advance or credit to, or guarantee (directly or indirectly or by an instrument having the effect of assuring another's payment or performance on any obligation or capability of so doing or otherwise), endorse or otherwise become contingently liable, directly or indirectly, in connection with the obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or agree contingently to do so) any stock, obligations, assets or securities of, or any other interest in, or make any capital contribution to, any Person. Section 3.16. Capital Expenditures. The Issuer shall not make any expenditure (by long-term or operating lease or otherwise) for capital assets (either realty or personalty). Section 3.17. Removal of Administrator. So long as any Notes are Outstanding, the Issuer shall not remove the Administrator unless the Rating Agency Condition shall have been satisfied in connection with such removal and the Indenture Trustee receives written notice of the foregoing and consents thereto. Section 3.18. Restricted Payments. Except with respect to the proceeds from issuance of the Notes, the Issuer shall not, directly or indirectly, (i) pay any dividend or make any distribution (by reduction of capital or otherwise), whether in cash, property, securities or a combination thereof, to the Owner Trustee or any owner of a beneficial interest in the Issuer or otherwise with respect to any ownership or equity interest or security in or of the Issuer or to the Servicer, (ii) redeem, purchase, retire or otherwise acquire for value any such ownership or equity interest or security or (iii) set aside or otherwise segregate any amounts for any such purpose; provided, however, that the Issuer may make, or cause to be made, distributions as contemplated by, and to the extent funds are available for such purpose under, the Sale and Servicing Agreement, this Indenture or the Trust Agreement. The Issuer will not, directly or indirectly, make payments to or distributions from the Note Distribution Account, the Collection 26 Account, or the Reserve Account except in accordance with this Indenture and the Basic Documents. Section 3.19. Notice of Events of Default. The Issuer shall give the Indenture Trustee and the Rating Agencies prompt written notice of each Event of Default hereunder, and of each default on the part of the Servicer or the Seller of its obligations under the Sale and Servicing Agreement. Section 3.20. Further Instruments and Acts. Upon request of the Indenture Trustee, the Issuer will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture. ARTICLE IV. SATISFACTION AND DISCHARGE Section 4.01. Satisfaction and Discharge of Indenture. This Indenture shall cease to be of further effect with respect to the Notes except as to (i) rights of registration of transfer and exchange, (ii) substitution of mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments of principal thereof and interest thereon, (iv) Sections 3.03, 3.04, 3.05, 3.08, 3.10, 3.11, 3.12, 3.13, 3.15, 3.16 and 3.18, (v) the rights, obligations and immunities of the Indenture Trustee hereunder (including the rights of the Indenture Trustee under Section 6.07 and the obligations of the Indenture Trustee under Section 4.02) and (vi) the rights of Noteholders as beneficiaries hereof with respect to the property so deposited with the Indenture Trustee payable to all or any of them, and the Indenture Trustee, on demand of and at the expense of the Issuer, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture with respect to the Notes, when (A) either: 1. all Notes theretofore authenticated and delivered (other than (i) Notes that have been destroyed, lost or stolen and that have been replaced or paid as provided in Section 2.06 and (ii) Notes for the payment of which money has theretofore been deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or discharged from such trust, as provided in Section 3.03), have been delivered to the Indenture Trustee for cancellation; or 2. all Notes not theretofore delivered to the Indenture Trustee for cancellation a. have become due and payable, b. will become due and payable at the Class D Maturity Date within one year or 27 c. are to be called for redemption within one year under arrangements satisfactory to the Indenture Trustee for the giving of notice of redemption by the Indenture Trustee in the name, and at the expense, of the Issuer; and the Issuer, in the case of a, b, or c above, has irrevocably deposited or caused to be irrevocably deposited with the Indenture Trustee cash or direct obligations of or obligations guaranteed by the United States of America (that will mature prior to the date such amounts are payable), in trust for such purpose, in an amount sufficient to pay and discharge the entire indebtedness on such Notes not theretofore delivered to the Indenture Trustee for cancellation when due to the applicable Stated Maturity Date or Redemption Date (if Notes shall have been called for redemption pursuant to Section 10.01), as the case may be; (B) the Issuer has paid or caused to be paid all other sums payable hereunder by the Issuer including, but not limited to, fees, reimbursements, indemnities and expenses due to the Indenture Trustee; and (C) the Issuer has delivered to the Indenture Trustee an Officer's Certificate, an Opinion of Counsel and (if required by the TIA or the Indenture Trustee) an Independent Certificate from a firm of certified public accountants, each meeting the applicable requirements of Section 11.01(a) and, subject to Section 11.02, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with. Section 4.02. Application of Trust Money. All moneys deposited with the Indenture Trustee pursuant to Section 4.01 hereof shall be held in trust and applied by it in accordance with the provisions of the Notes and this Indenture to the payment, either directly or through any Paying Agent, as the Indenture Trustee may determine, to the Holders of the particular Notes for the payment or redemption of which such moneys have been deposited with the Indenture Trustee, of all sums due and to become due thereon for principal and interest; but such moneys need not be segregated from other funds except to the extent required herein, in the Sale and Servicing Agreement or by law. Section 4.03. Repayment of Moneys Held by Paying Agent. In connection with the satisfaction and discharge of this Indenture with respect to the Notes, all moneys then held by any Paying Agent other than the Indenture Trustee under the provisions of this Indenture with respect to such Notes shall, upon written demand of the Issuer, be paid to the Indenture Trustee to be held and applied according to Section 3.03; and thereupon, such Paying Agent shall be released from all further liability with respect to such moneys. Section 4.04. Release of Collateral. Subject to Section 11.01 and the terms of the Basic Documents, the Indenture Trustee shall release property from the lien of this Indenture only upon receipt by it of an Issuer Request accompanied by an Officer's Certificate, an Opinion of Counsel and Independent Certificates in accordance with TIA Sections 314(c) and 314(d)(1) or an Opinion of Counsel in lieu of such Independent Certificates to the effect that the TIA does not require any such Independent Certificates. 28 ARTICLE V. REMEDIES Section 5.01. Events of Default. "Event of Default", wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (i) default in the payment of any interest on any Note of the Controlling Class when the same becomes due and payable, and such default shall continue for a period of thirty-five (35) days; (ii) default in the payment of the principal of or any installment of the principal of any Note on its related Stated Maturity Date; (iii) default in the observance or performance of any representation, warranty, covenant or agreement of the Issuer made in this Indenture (other than a covenant or agreement, a default in the observance or performance of which is elsewhere in this Section specifically dealt with) or in any certificate or other writing delivered pursuant hereto or in connection herewith proving to have been incorrect in any material respect as of the time when the same shall have been made, and such default shall continue or not be cured, or the circumstance or condition in respect of which such misrepresentation or warranty was incorrect shall not have been eliminated or otherwise cured, for a period of thirty (30) days after there shall have been given, by registered or certified mail, to the Issuer by the Indenture Trustee or to the Issuer and the Indenture Trustee by the Holders of at least 25% of the Outstanding Amount of the Controlling Class of Notes, a written notice specifying such default or incorrect representation or warranty and requiring it to be remedied and stating that such notice is a notice of Default hereunder; (iv) the filing of a decree or order for relief by a court having jurisdiction in the premises in respect of the Issuer or any substantial part of the Trust Estate in an involuntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Issuer or for any substantial part of the Trust Estate, or the ordering of the winding-up or liquidation of the Issuer's affairs, and such decree or order shall remain unstayed and in effect for a period of sixty (60) consecutive days; or (v) the commencement by the Issuer of a voluntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by the Issuer to the entry of an order for relief in an involuntary case under any such law, or the consent by the Issuer to the appointment of or taking of possession by a receiver, liquidator, assignee, 29 custodian, trustee, sequestrator or similar official of the Issuer or for any substantial part of the Trust Estate, or the making by the Issuer of any general assignment for the benefit of creditors, or the failure by the Issuer generally to pay its debts as such debts become due, or the taking of any action by the Issuer in furtherance of any of the foregoing. The Issuer shall promptly deliver to the Indenture Trustee written notice in the form of an Officer's Certificate of any event that with the giving of notice and the lapse of time would become an Event of Default under clause (iii), its status and what action the Issuer is taking or proposes to take with respect thereto. Section 5.02. Acceleration of Maturity; Rescission and Annulment. (a) If an Event of Default shall occur and be continuing, then and in every such case the Indenture Trustee may, or the Indenture Trustee if so directed in writing by the Holders of Notes representing not less than a majority of the Outstanding Amount of the Controlling Class of Notes shall, declare all the Notes to be then immediately due and payable, by a notice in writing to the Issuer (and to the Indenture Trustee if given by Noteholders), and upon any such declaration the Outstanding Amount of such Notes, together with accrued and unpaid interest thereon through the date of acceleration, shall become immediately due and payable. (b) If an Event of Default under this Indenture shall have occurred, the Indenture Trustee in its discretion may, or if so requested in writing by Holders of Notes representing at least a majority of the Outstanding Amount of the Controlling Class of Notes, shall, declare by written notice to the Issuer all of the Notes to be immediately due and payable, and upon any such declaration, the Outstanding Amount of the Notes, together with accrued interest thereon through the date of acceleration, shall become immediately due and payable as provided in the Notes set forth in Exhibit A-1, Exhibit A-2, Exhibit A-3, Exhibit A-4, Exhibit B, Exhibit C and Exhibit D. Notwithstanding anything to the contrary in this paragraph (b), if an Event of Default specified in clauses (iv) or (v) of Section 5.01 shall have occurred and be continuing the Notes shall become immediately due and payable at par, together with accrued interest thereon. (c) At any time after such declaration of acceleration of maturity has been made and before a judgment or decree for payment of the money due has been obtained by the Indenture Trustee as hereinafter in this Article V provided, the Holders of Notes representing a majority of the Outstanding Amount of the Controlling Class of Notes, by written notice to the Issuer and the Indenture Trustee, may rescind and annul such declaration and its consequences if: (i) the Issuer has paid or deposited with the Indenture Trustee a sum sufficient to pay: (A) all payments of principal of and interest on the Notes and all other amounts that would then be due hereunder or upon such Notes if the Event of Default giving rise to such acceleration had not occurred; and 30 (B) all sums paid by the Indenture Trustee hereunder and the reasonable compensation, indemnity, reimbursement, expenses and disbursements of the Indenture Trustee and its agents and counsel and the reasonable compensation, expenses and disbursements of the Owner Trustee and its agents and counsel; and (ii) all Events of Default, other than the nonpayment of the principal of the Notes that has become due solely by such acceleration, have been cured or waived as provided in Section 5.12. No such rescission shall affect any subsequent default or impair any right consequent thereto. Section 5.03. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee. (a) The Issuer covenants that if (i) a default is made in the payment of any interest on any Note when the same becomes due and payable, and such default continues for a period of thirty-five (35) days or, (ii) default is made in the payment of the principal of or any installment of the principal of any Note when the same becomes due and payable, the Issuer will, upon demand of the Indenture Trustee, pay to it, for the benefit of the Holders of the Notes, the entire amount then due and payable on such Notes in respect of principal and interest, with interest on the overdue principal and, to the extent payment at such rate of interest shall be legally enforceable, on overdue installments of interest at the related Interest Rate and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses and disbursements of the Indenture Trustee and its agents and counsel. (b) In case the Issuer shall fail forthwith to pay such amounts upon such demand, the Indenture Trustee, in its own name and as trustee of an express trust, may institute a Proceeding for the collection of the sums so due and unpaid, and may prosecute such Proceeding to judgment or final decree, and may enforce the same against the Issuer or other obligor on such Notes and collect in the manner provided by law out of the Trust Estate or the property of any other obligor on such Notes, wherever situated, the moneys adjudged or decreed to be payable. (c) If an Event of Default occurs, the Indenture Trustee may, as more particularly provided in Section 5.04, in its discretion, or shall, at the directions of the Holders of at least a majority of the Outstanding Amount of the Controlling Class of Notes, proceed to protect and enforce its rights and the rights of the Noteholders, by such appropriate Proceedings as the Indenture Trustee or the Indenture Trustee at the direction of the Holders of at least a majority of the Outstanding Amount of the Controlling Class of Notes shall reasonably deem most effective to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy or legal or equitable right vested in the Indenture Trustee by this Indenture or by law. (d) In case there shall be pending, relative to the Issuer or any other obligor on the Notes or any Person having or claiming an ownership interest in the Trust Estate, Proceedings under Title 11 of the United States Code or any other applicable federal or state 31 bankruptcy, insolvency or other similar law, or in case a receiver, assignee or trustee in bankruptcy or reorganization, or liquidator, sequestrator or similar official shall have been appointed for or taken possession of the Issuer or its property or such other obligor or Person, or in case of any other comparable Proceedings relative to the Issuer or other obligor on the Notes, or to the creditors or property of the Issuer or such other obligor, the Indenture Trustee, irrespective of whether the principal of any Notes shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Indenture Trustee shall have made any demand pursuant to the provisions of this Section, shall be entitled and empowered, by intervention in such Proceedings or otherwise: (i) to file and prove a claim or claims for the entire amount of principal and interest owing and unpaid in respect of the Notes and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Indenture Trustee (including any claim for reasonable compensation to the Indenture Trustee and each predecessor Indenture Trustee, and their respective agents, attorneys and counsel, and for reimbursement of reasonable out-of-pocket expenses and liabilities incurred, by the Indenture Trustee and each predecessor Indenture Trustee, except as a result of negligence or bad faith) and of the Noteholders allowed in such Proceedings; (ii) unless prohibited by applicable law or regulation, to vote on behalf of the Holders of Notes in any election of a trustee, a standby trustee or a Person performing similar functions in any such Proceedings; (iii) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute all amounts received with respect to the claims of the Noteholders and of the Indenture Trustee on their behalf; and (iv) to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Indenture Trustee or the Holders of Notes allowed in any Proceedings relative to the Issuer, its creditors or its property; and any trustee, receiver, liquidator, custodian or other similar official in any such Proceeding is hereby authorized by each of such Noteholders to make payments to the Indenture Trustee and, in the event that the Indenture Trustee shall consent to the making of payments directly to such Noteholders, to pay to the Indenture Trustee such amounts as shall be sufficient to cover reasonable compensation to the Indenture Trustee, each predecessor Indenture Trustee and their respective agents, attorneys and counsel, and all other expenses, reimbursements, indemnities and liabilities incurred by the Indenture Trustee and each predecessor Indenture Trustee except as a result of negligence or bad faith. (e) Nothing herein contained shall be deemed to authorize the Indenture Trustee to authorize or consent to or vote for or accept or adopt on behalf of any Noteholder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder thereof or to authorize the Indenture Trustee to vote in respect of the claim of any Noteholder in any such proceeding except, as aforesaid, to vote for the election of a trustee in bankruptcy or similar Person. 32 (f) All rights of action and of asserting claims under this Indenture, or under any of the Notes, may be enforced by the Indenture Trustee without the possession of any of the Notes or the production thereof in any Proceedings relative thereto, and any such Proceedings instituted by the Indenture Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment, subject to the payment of the expenses, disbursements and compensation of the Indenture Trustee, each predecessor Indenture Trustee and their respective agents and attorneys, shall be for the ratable benefit of the Holders of the Notes. (g) In any Proceedings brought by the Indenture Trustee (and also any Proceedings involving the interpretation of any provision of this Indenture to which the Indenture Trustee shall be a party), the Indenture Trustee shall be held to represent all the Holders of the Notes, and it shall not be necessary to make any Noteholder a party to any such Proceedings. Section 5.04. Remedies; Priorities. (a) If an Event of Default shall have occurred and be continuing, the Indenture Trustee may and at the written direction of the outstanding Controlling Class of the Notes shall, do one or more of the following (subject to Section 5.05): (i) institute Proceedings in its own name and as trustee of an express trust for the collection of all amounts then payable on the Notes or under this Indenture with respect thereto, whether by declaration or otherwise, enforce any judgment obtained and collect from the Issuer and any other obligor on such Notes moneys adjudged due; (ii) institute Proceedings from time to time for the complete or partial foreclosure of this Indenture with respect to the Trust Estate; (iii) exercise any remedies of a secured party under the UCC and take any other appropriate action to protect and enforce the rights and remedies of the Indenture Trustee and the Holders of the Notes; and (iv) sell the Trust Estate or any portion thereof or rights or interest therein, at one or more public or private sales called and conducted in any manner permitted by law; provided that Indenture Trustee may not sell or otherwise liquidate the Trust Estate following an Event of Default unless: (A) the Event of Default is of the type described in Section 5.01(i) or (ii); or (B) with respect to an Event of Default described in Section 5.01(iii): (i) the Noteholders of all Outstanding Notes and the Certificateholders of all outstanding Certificates consent thereto; or 33 (ii) the proceeds of such sale or liquidation are sufficient to pay in full the principal of and accrued interest on the Outstanding Notes and outstanding Certificates. (C) with respect to any Event of Default described in Section 5.01 (iv) and (v): (i) the Noteholders of Notes evidencing 100% of the principal amount of the Controlling Class consent thereto; or (ii) the proceeds of such sale or liquidation are sufficient to pay in full the principal of and the accrued interest on the Outstanding Notes; or (iii) the Indenture Trustee (x) determines (but shall have no obligation to make such determination) that the Trust Estate will not continue to provide sufficient funds for the payment of principal of and interest on the Notes as they would have become due if the Notes had not been declared due and payable; and (y) the Indenture Trustee obtains the consent of Noteholders of Notes evidencing not less than 66 2/3% of the principal amount of the Controlling Class; or In determining such sufficiency or insufficiency with respect to clause (B)(ii) and (C)(ii) or (C)(iii)(x), Indenture Trustee may, but need not, obtain at the Issuer's expense, and rely upon an opinion of an Independent investment banking or accounting firm of national reputation as to the feasibility of such proposed action and as to the sufficiency of the Trust Estate for such purpose. (b) (i) Notwithstanding the provisions of Section 8.02, following the occurrence and during the continuation of an Event of Default specified in Section 5.01(i), 5.01(ii), 5.01(iv) or 5.01(v) which has resulted in an acceleration of the Notes (or following the occurrence of any such event after an Event of Default specified in Section 5.01(iii) has occurred and the Trust Estate has been liquidated), if the Indenture Trustee collects any money or property, it shall pay out such money or property (and other amounts including amounts held on deposit in the Reserve Account) held as Collateral for the benefit of the Noteholders, net of liquidation costs associated with the sale of the Trust Estate, in the following order: FIRST: to the Indenture Trustee, any amounts due under Section 6.07 to the extent that such amounts were not previously paid by the Servicer, such unpaid amount not to exceed $400,000 per year; SECOND: to the Servicer for due and unpaid Servicing Fees and Advances not previously reimbursed; 34 THIRD: to Class A Noteholders for amounts due and unpaid on the Class A Notes in respect of interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Class A Notes in respect of interest; FOURTH: to Holders of the Class A-1 Notes for amounts due and unpaid on the Class A-1 Notes in respect of principal, ratably, without preference or priority of any kind, according to the amounts due and payable on the Class A-1 Notes in respect of principal, until the Outstanding Amount of the Class A-1 Notes is reduced to zero; FIFTH: to Holders of the Class A-2 Notes, Class A-3 Notes and Class A-4 Notes for amounts due and unpaid on the Class A-2 Notes, Class A-3 Notes and Class A-4 Notes in respect of principal, ratably, without preference or priority of any kind, according to the amounts due and payable on the Class A-2 Notes, Class A-3 Notes and Class A-4 Notes in respect of principal, until the Outstanding Amount of the Class A-2 Notes, Class A-3 Notes and Class A-4 Notes is reduced to zero; SIXTH: to Holders of the Class B Notes for amounts due and unpaid on the Class B Notes in respect of interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Class B Notes in respect of interest; SEVENTH: to Holders of the Class B Notes for amounts due and unpaid on the Class B Notes in respect of principal, ratably, without preference or priority of any kind, according to the amounts due and payable on the Class B Notes in respect of principal, until the Outstanding Amount of the Class B Notes is reduced to zero; EIGHTH: to Holders of the Class C Notes for amounts due and unpaid on the Class C Notes in respect of interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Class C Notes in respect of interest; NINTH: to Holders of the Class C Notes for amounts due and unpaid on the Class C Notes in respect of principal, ratably, without preference or priority of any kind, according to the amounts due and payable on the Class C Notes in respect of principal, until the Outstanding Amount of the Class C Notes is reduced to zero; TENTH: to Holders of the Class D Notes for amounts due and unpaid on the Class D Notes in respect of interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Class D Notes in respect of interest; ELEVENTH: to Holders of the Class D Notes for amounts due and unpaid on the Class D Notes in respect of principal, ratably, without preference or priority of any kind, according to the amounts due and payable on the Class D Notes in respect of principal, until the Outstanding Amount of the Class D Notes is reduced to zero; TWELFTH: to the Indenture Trustee, any amounts due under Section 6.07 to the extent not paid in clause FIRST above; and THIRTEENTH: to the Certificate Distribution Account, for distribution to the Certificateholders. 35 The Indenture Trustee may fix a record date and payment date for any payment to Noteholders pursuant to this Section. At least fifteen (15) days before such record date, the Issuer shall mail to each Noteholder and the Indenture Trustee a notice that states the record date, the payment date and the amount to be paid. (ii) Except as provided in Section 5.04(b)(i), the Indenture Trustee shall make all payments and distributions of the Trust Estate in accordance with Section 8.02. Section 5.05. Optional Preservation of the Receivables. If the Notes have been declared to be due and payable under Section 5.02 following an Event of Default, and such declaration and its consequences have not been rescinded and annulled, the Indenture Trustee may, but need not, elect to maintain possession of the Trust Estate. It is the desire of the parties hereto and the Noteholders that there be at all times sufficient funds for the payment of principal of and interest on the Notes, and the Indenture Trustee shall take such desire into account when determining whether or not to maintain possession of the Trust Estate. In determining whether or not to maintain possession of the Trust Estate, the Indenture Trustee may, at the expense of the Issuer and paid in the priority set forth in Section 5.05(b) of the Sale and Servicing Agreement, but need not, obtain and conclusively rely upon an opinion of an Independent investment banking or accounting firm of national reputation as to the feasibility of such proposed action and as to the sufficiency of the Trust Estate for such purpose. Section 5.06. Limitation of Suits. No Holder of any Note shall have any right to institute any Proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless: (i) such Holder has previously given written notice to the Indenture Trustee of a continuing Event of Default; (ii) the Event of Default arises from the Servicer's failure to remit payments when due or the Holders of not less than 25% of the Outstanding Amount of the Controlling Class of Notes have made written request to the Indenture Trustee to institute such Proceeding in respect of such Event of Default in its own name as Indenture Trustee hereunder; (iii) such Holder or Holders have offered to the Indenture Trustee reasonable indemnity against the costs, expenses and liabilities that may be incurred in complying with such request; (iv) the Indenture Trustee for sixty (60) days after its receipt of such notice, request and offer of indemnity has failed to institute such Proceedings; and (v) no direction inconsistent with such written request has been given to the Indenture Trustee during such sixty (60) day period by the Holders of a majority of the Outstanding Amount of the Controlling Class of Notes. It is understood and intended that no one or more Holders of Notes shall have any right in any manner whatsoever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders of Notes or to obtain or to seek to 36 obtain priority or preference over any other Holders or to enforce any right under this Indenture, except in the manner herein provided. In the event the Indenture Trustee shall receive conflicting or inconsistent requests and indemnity from two or more groups of Holders of Notes pursuant to this Section, each representing less than a majority of the Outstanding Amount of the Controlling Class of Notes, the Indenture Trustee shall act at the direction of the group representing the greater percentage of the Outstanding Amount of Notes and if there is no such group then in its sole discretion may determine what action, if any, shall be taken, notwithstanding any other provisions of this Indenture. Section 5.07. Unconditional Rights of Noteholders To Receive Principal and Interest. Notwithstanding any other provisions in this Indenture, the Holder of any Note shall have the right, which is absolute and unconditional, to receive payment of the principal of and interest, if any, on such Note on or after the respective due dates thereof expressed in such Note or in this Indenture (or, in the case of redemption, on or after the Redemption Date) and to institute suit for the enforcement of any such payment, and such right shall not be impaired without the consent of such Holder. Section 5.08. Restoration of Rights and Remedies. If the Indenture Trustee or any Noteholder has instituted any Proceeding to enforce any right or remedy under this Indenture and such Proceeding has been discontinued or abandoned for any reason or has been determined adversely to the Indenture Trustee or to such Noteholder, then and in every such case the Issuer, the Indenture Trustee and the Noteholders shall, subject to any determination in such Proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Indenture Trustee and the Noteholders shall continue as though no such Proceeding had been instituted. Section 5.09. Rights and Remedies Cumulative. No right or remedy herein conferred upon or reserved to the Indenture Trustee or to the Noteholders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. Section 5.10. Delay or Omission Not a Waiver. No delay or omission of the Indenture Trustee, or any Holder of any Note to exercise any right or remedy accruing upon any Default or Event of Default shall impair any such right or remedy or constitute a waiver of any such Default or Event of Default or an acquiescence therein. Every right and remedy given by this Article V or by law to the Indenture Trustee or to the Noteholders may be exercised from time to time, and as often as may be deemed expedient, by the Indenture Trustee or the Noteholders, as the case may be. Section 5.11. Control by the Controlling Class of Noteholders. The Holders of a majority of the Outstanding Amount of the Controlling Class of Notes shall have the right to direct the time, method and place of conducting any Proceeding for any remedy available to the 37 Indenture Trustee with respect to the Notes or exercising any trust or power conferred on the Indenture Trustee; provided that: (i) such direction shall not be in conflict with any rule of law or with this Indenture; (ii) subject to the express terms of Section 5.04, any direction to the Indenture Trustee to sell or liquidate the Trust Estate shall be by Holders of Notes representing not less than 100% of the Outstanding Amount of the Controlling Class of Notes; (iii) if the conditions set forth in Section 5.05 have been satisfied and the Indenture Trustee elects to retain the Trust Estate pursuant to such Section, then any written direction to the Indenture Trustee by Holders of Notes representing less than 100% of the Outstanding Amount of the Notes to sell or liquidate the Trust Estate shall be of no force and effect; and (iv) the Indenture Trustee may take any other action deemed proper by the Indenture Trustee that is not inconsistent with such direction. Notwithstanding the rights of Noteholders set forth in this Section, subject to Section 6.01, the Indenture Trustee need not take any action that it determines might involve it in liability or might materially adversely affect the rights of any Noteholders not consenting to such action. Section 5.12. Waiver of Past Defaults. Prior to the declaration of the acceleration of the maturity of the Notes as provided in Section 5.02, the Holders of Notes of not less than a majority of the Outstanding Amount of the Controlling Class of Notes may, waive any past Default or Event of Default and its consequences except a Default (a) in payment of principal of or interest on any of the Notes or (b) in respect of a covenant or provision hereof that cannot be modified or amended without the consent of the Holder of each Note. In the case of any such waiver, the Issuer, the Indenture Trustee and the Holders of the Notes shall be restored to their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereto. Upon any such waiver, such Default shall cease to exist and be deemed to have been cured and not to have occurred, and any Event of Default arising therefrom shall be deemed to have been cured and not to have occurred, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereto. Section 5.13. Undertaking for Costs. All parties to this Indenture agree, and each Holder of a Note by such Holder's acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Indenture Trustee for any action taken, suffered or omitted by it as Indenture Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the 38 provisions of this Section shall not apply to (a) any suit instituted by the Indenture Trustee, (b) any suit instituted by any Noteholder, or group of Noteholders, in each case holding in the aggregate more than 10% of the Outstanding Amount of the Notes (or in the case of a right or remedy under this Indenture which is instituted by the Controlling Class, more than 10% of the Outstanding Amount of the Controlling Class) or (c) any suit instituted by any Noteholder for the enforcement of the payment of principal of or interest on any Note on or after the respective due dates expressed in such Note and in this Indenture (or, in the case of redemption, on or after the Redemption Date). Section 5.14. Waiver of Stay or Extension Laws. The Issuer covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Indenture Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. Section 5.15. Action on Notes. The Indenture Trustee's right to seek and recover judgment on the Notes or under this Indenture shall not be affected by the seeking, obtaining or application of any other relief under or with respect to this Indenture. Neither the lien of this Indenture nor any rights or remedies of the Indenture Trustee or the Noteholders shall be impaired by the recovery of any judgment by the Indenture Trustee against the Issuer or by the levy of any execution under such judgment upon any portion of the Trust Estate or upon any of the assets of the Issuer. Any money or property collected by the Indenture Trustee shall be applied in accordance with Section 5.04(b). Section 5.16. Performance and Enforcement of Certain Obligations. (a) Promptly following a request from the Indenture Trustee to do so and at the Administrator's expense, the Issuer shall take all such lawful action as the Indenture Trustee may request to compel or secure the performance and observance by the Seller or the Servicer, as applicable, of each of their obligations to the Issuer under or in connection with the Sale and Servicing Agreement or the Receivables Purchase Agreement, as applicable, and to exercise any and all rights, remedies, powers and privileges lawfully available to the Issuer under or in connection with the Sale and Servicing Agreement or the Receivables Purchase Agreement to the extent and in the manner directed by the Indenture Trustee, including the transmission of notices of default on the part of either Seller or the Servicer thereunder and the institution of legal or administrative actions or proceedings to compel or secure performance by the Seller or the Servicer of each of their obligations under the Sale and Servicing Agreement and the Receivables Purchase Agreement; provided, however, nothing herein shall in any way impose on the Indenture Trustee the duty to monitor the performance of the Seller or the Servicer of any of their liabilities, duties or obligations under any Basic Document. (b) If an Event of Default has occurred, the Indenture Trustee may, and at the direction (which direction shall be in writing) of the Holders of not less than a majority of the Outstanding Amount of the Controlling Class of Notes shall, exercise all rights, remedies, powers, privileges and claims of the Issuer against the Seller or the Servicer under or in 39 connection with the Sale and Servicing Agreement and the Receivables Purchase Agreement, including the right or power to take any action to compel or secure performance or observance by the Seller or the Servicer, as the case may be, of each of their obligations to the Issuer thereunder and to give any consent, request, notice, direction, approval, extension or waiver under the Sale and Servicing Agreement and the Receivables Purchase Agreement, as the case may be, and any right of the Issuer to take such action shall be suspended. ARTICLE VI. THE INDENTURE TRUSTEE Section 6.01. Duties of Indenture Trustee. (a) If an Event of Default has occurred and is continuing of which a Responsible Officer of the Indenture Trustee has actual knowledge, the Indenture Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs. Except during the continuance of an Event of Default, the Indenture Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Indenture Trustee. In the absence of bad faith or negligence on its part, the Indenture Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon the face value of the certificates, reports, resolutions, documents, orders, opinions or other instruments furnished to the Indenture Trustee and conforming to the requirements of this Indenture; provided, however, that the Indenture Trustee shall not be responsible for the accuracy or content of any such resolution, certificate, statement, opinion, report, document, order or other instrument; however, the Indenture Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture. If any such instrument is found not to conform in any material respect to the requirements of this Agreement, the Indenture Trustee shall notify the Noteholders of such instrument in the event that the Indenture Trustee, after so requesting, does not receive a satisfactorily corrected instrument. (b) The Indenture Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that: (i) this paragraph does not limit the effect of paragraph (a) of this Section; (ii) the Indenture Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer unless it is proved that the Indenture Trustee was negligent in ascertaining the pertinent facts; and (iii) the Indenture Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to the terms of this Indenture or any other Basic Documents. 40 (c) Every provision of this Indenture that in any way relates to the Indenture Trustee is subject to this Section. (d) The Indenture Trustee shall not be liable for indebtedness evidenced by or arising under any of the Basic Documents, including principal of or interest on the Notes, or interest on any money received by it except as the Indenture Trustee may agree in writing with the Issuer. (e) Money held in trust by the Indenture Trustee need not be segregated from other funds except to the extent required by law or the terms of this Indenture or the Sale and Servicing Agreement. (f) No provision of this Indenture shall require the Indenture Trustee to advance, expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. (g) Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Indenture Trustee shall be subject to the provisions of this Section and to the provisions of the TIA. (h) In no event shall the Indenture Trustee be required to perform, or be responsible for the manner of performance of, any of the obligations of the Servicer or any other party under the Sale and Servicing Agreement. (i) The Indenture Trustee shall have no duty (A) to see to any recording, filing, or depositing of this Indenture or any agreement referred to herein or any financing statement or continuation statement evidencing a security interest, or to see to the maintenance of any such recording or filing or depositing or to any rerecording, refiling or redepositing of any thereof, (B) to see to any insurance, or (C) to see to the payment or discharge of any tax, assessment, or other governmental charge or any lien or encumbrance of any kind owing with respect to, assessed or levied against, any part of the Trust Fund. The Indenture Trustee, or a Responsible Officer thereof, shall be charged with actual knowledge of any default or an Event of Default if a Responsible Officer actually knows of such default or Event of Default or the Indenture Trustee receives written notice of such default or Event of Default from the Issuer, the Servicer or Noteholders owning Notes aggregating not less than 10% of the Outstanding Amount of the Notes. Notwithstanding the foregoing, the Indenture Trustee shall not be required to take notice and in the absence of such actual notice and knowledge, the Indenture Trustee may conclusively assume that there is no such default or Event of Default. Section 6.02. Rights of Indenture Trustee. (a) The Indenture Trustee may conclusively rely on the face value of any document believed by it to be genuine and to have been signed or presented by the proper person. The Indenture Trustee need not investigate any fact or matter stated in the document. 41 (b) Before the Indenture Trustee acts or refrains from acting, it may require an Officer's Certificate or an Opinion of Counsel from the appropriate party. The Indenture Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on an Officer's Certificate or Opinion of Counsel from the appropriate party. The right of the Indenture Trustee to perform any discretionary act enumerated in this Indenture or in any Basic Document shall not be construed as a duty of the Indenture Trustee and the Indenture Trustee shall not be answerable for other than its negligence or willful misconduct in the performance of such discretionary act. (c) The Indenture Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys or a custodian or nominee and the Indenture Trustee shall not be responsible for any misconduct or negligence on the part of any such agent, attorney or custodian appointed by the Indenture Trustee with due care. (d) The Indenture Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within its rights or powers; provided, that the Indenture Trustee's conduct does not constitute willful misconduct, negligence or bad faith. (e) The Indenture Trustee may consult, at the Issuer's expense and paid in accordance with Section 4.16 of the Sale and Servicing Agreement or, to the extent not so paid, in accordance with and in the priority set forth in Section 5.05(b) of the Sale and Servicing Agreement, with counsel, and the written advice or opinion of counsel with respect to legal matters relating to this Indenture and the Notes shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel. (f) In the event that the Indenture Trustee is also acting as Paying Agent, Note Registrar or collateral agent, the rights and protections afforded to the Indenture Trustee pursuant to this Article 6 shall be afforded to such Paying Agent, Note Registrar or collateral agent. (g) The Indenture Trustee shall be under no obligation to exercise any of the trusts or powers vested in it by this Indenture or to institute, conduct or defend any litigation hereunder or in relation hereto at the request, order or direction of any of the Noteholders, pursuant to the provisions of this Indenture, unless such Noteholders shall have offered to the Indenture Trustee reasonable security or indemnity against the costs, expenses and liabilities which may be incurred therein or thereby; (h) The right of the Indenture Trustee to perform any discretionary act enumerated in this Indenture shall not be construed as a duty, and the Indenture Trustee shall not be answerable for other than its negligence or willful misconduct in the performance of such act; and (i) The Indenture Trustee shall not be required to give any bond or surety in respect of the powers granted hereunder. Section 6.03. Individual Rights of Indenture Trustee. The Indenture Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were not Indenture 42 Trustee. Any Paying Agent, Note Registrar, co-registrar or co-paying agent may do the same with like rights. However, the Indenture Trustee must comply with Section 6.11. Section 6.04. Indenture Trustee's Disclaimer. The Indenture Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture, the Trust Estate or the Notes, it shall not be accountable for the Issuer's use of the proceeds from the Notes, and it shall not be responsible for any statement of the Issuer in the Indenture, any Basic Document or in any document issued in connection with the sale of the Notes or in the Notes other than the Indenture Trustee's certificate of authentication. Section 6.05. Notice of Defaults. If a Default occurs and is continuing and if it is actually known to a Responsible Officer of the Indenture Trustee, the Indenture Trustee shall mail to each Noteholder notice of the Default within thirty (30) days after it occurs. Except in the case of a Default in payment of principal of or interest on any Note (including payments pursuant to the mandatory redemption provisions of such Note), the Indenture Trustee may withhold the notice to Noteholders if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of Noteholders. Section 6.06. Reports by Indenture Trustee to Holders. Solely from information provided by the Servicer, the Indenture Trustee shall deliver to each Noteholder such information as may be required to enable such holder to prepare its federal and state income tax returns. Section 6.07. Compensation and Indemnity. The Issuer shall cause the Servicer to pay to the Indenture Trustee from time to time reasonable compensation for its services. The Indenture Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuer shall cause the Servicer to reimburse the Indenture Trustee for all reasonable out-of-pocket expenses incurred or made by it, including costs of collection, in addition to the compensation for its services. Such expenses shall include but are not limited to the reasonable out-of-pocket compensation and expenses, disbursements and advances of the Indenture Trustee's agents, counsel, accountants and experts. The Issuer shall cause the Servicer to indemnify the Indenture Trustee against any and all loss, liability or expense (including attorneys' fees and expenses) incurred by it in connection with the administration of this trust and the performance of its duties hereunder or under the Sale and Servicing Agreement or under any other Basic Document. The Indenture Trustee shall notify the Issuer and the Servicer promptly of any claim for which it may seek indemnity. Failure by the Indenture Trustee to so notify the Issuer and the Servicer shall not relieve the Issuer or the Servicer of its obligations hereunder. The Issuer shall, or shall cause the Servicer to, defend any such claim, and the Indenture Trustee may have separate counsel and the Issuer shall, or shall cause the Administrator to, pay the fees and expenses of such counsel. Neither the Issuer nor the Servicer need reimburse any expense or indemnify against any loss, liability or expense incurred by the Indenture Trustee through the Indenture Trustee's own willful misconduct, negligence or bad faith. Anything in this Agreement to the contrary notwithstanding, in no event shall the Indenture Trustee be liable for special, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Indenture Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action. The Issuer's payment obligations to the Indenture Trustee and the Administrator's indemnities to the Indenture Trustee pursuant to this Section shall survive the discharge of this 43 Indenture or the earlier resignation or removal of the Indenture Trustee. When the Indenture Trustee incurs expenses after the occurrence of a Default specified in Section 5.01(iv) or (v) with respect to the Issuer, the expenses are intended to constitute expenses of administration under Title 11 of the United States Code or any other applicable federal or state bankruptcy, insolvency or similar law. Section 6.08. Replacement of Indenture Trustee. No resignation or removal of the Indenture Trustee and no appointment of a successor Indenture Trustee shall become effective until the acceptance of appointment by the successor Indenture Trustee pursuant to this Section 6.08. The Indenture Trustee may resign at any time by so notifying the Issuer and each Rating Agency. The Holders of a majority in Outstanding Amount of the Controlling Class of Notes may remove the Indenture Trustee by notifying the Indenture Trustee if: (i) the Indenture Trustee fails to comply with Section 6.11; (ii) the Indenture Trustee is adjudged a bankrupt or insolvent; (iii) a receiver or other public officer takes charge of the Indenture Trustee or its property; (iv) the Indenture Trustee otherwise becomes incapable of acting; or (v) the Indenture Trustee breaches any representation, warranty or covenant made by it under any Basic Document. If the Indenture Trustee resigns or is removed or if a vacancy exists in the office of Indenture Trustee for any reason (the Indenture Trustee in such event being referred to herein as the retiring Indenture Trustee), the Issuer shall promptly appoint a successor Indenture Trustee. A successor Indenture Trustee shall deliver a written acceptance of its appointment to the retiring Indenture Trustee and to the Issuer. Thereupon the resignation or removal of the retiring Indenture Trustee shall become effective, and the successor Indenture Trustee shall have all the rights, powers and duties of the Indenture Trustee under this Indenture. The retiring Indenture Trustee shall be paid all amounts owed to it upon its resignation or removal. The successor Indenture Trustee shall mail a notice of its succession to Noteholders. The retiring Indenture Trustee shall promptly transfer all property held by it as Indenture Trustee to the successor Indenture Trustee. The retiring Indenture Trustee shall not be liable for the acts or omissions of any Successor Indenture Trustee. If a successor Indenture Trustee does not take office within 45 days after the retiring Indenture Trustee resigns or is removed, the retiring Indenture Trustee, the Issuer or the Holders of a majority in Outstanding Amount of the Controlling Class of Notes may petition any court of competent jurisdiction for the appointment of a successor Indenture Trustee. If the Indenture Trustee fails to comply with Section 6.11, any Noteholder may petition any court of competent jurisdiction for the removal of the Indenture Trustee and the appointment of a successor Indenture Trustee. 44 Notwithstanding the replacement of the Indenture Trustee pursuant to this Section, the Issuer's and the Administrator's obligations under Section 6.07 shall continue for the benefit of the retiring Indenture Trustee. Section 6.09. Successor Indenture Trustee by Merger. If the Indenture Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation without any further act shall be the successor Indenture Trustee; provided, that such corporation or banking association shall be qualified and eligible under Section 6.11. In case at the time such successor or successors by merger, conversion or consolidation to the Indenture Trustee shall succeed to the trusts created by this Indenture any of the Notes shall have been authenticated but not delivered, any such successor to the Indenture Trustee may adopt the certificate of authentication of any predecessor trustee and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Indenture Trustee may authenticate such Notes either in the name of any predecessor hereunder or in the name of the successor to the Indenture Trustee; and in all such cases such certificates shall have the full force that it is anywhere in the Notes or in this Indenture provided that the certificate of the Indenture Trustee shall have. Section 6.10. Appointment of Co-Indenture Trustee or Separate Indenture Trustee. (a) Notwithstanding any other provisions of this Indenture, at any time, for the purpose of meeting any legal requirement of any jurisdiction in which any part of the Trust Estate may at the time be located, the Indenture Trustee shall have the power and may execute and deliver all instruments to appoint one or more Persons to act as a co-trustee or co-trustees, or separate trustee or separate trustees, of all or any part of the Trust, and to vest in such Person or Persons, in such capacity and for the benefit of the Noteholders, such title to the Trust Estate, or any part thereof, and, subject to the other provisions of this Section, such powers, duties, obligations, rights and trusts as the Indenture Trustee may consider necessary or desirable. No co-trustee or separate trustee hereunder shall be required to meet the terms of eligibility as a successor trustee under Section 6.11 and no notice to Noteholders of the appointment of any co-trustee or separate trustee shall be required under Section 6.08 hereof. (b) Every separate trustee and co-trustee shall, to the extent permitted by law, be appointed and act subject to the following provisions and conditions: (i) all rights, powers, duties and obligations conferred or imposed upon the Indenture Trustee shall be conferred or imposed upon and exercised or performed by the Indenture Trustee and such separate trustee or co-trustee jointly (it being understood that such separate trustee or co-trustee is not authorized to act separately without the Indenture Trustee joining in such act), except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed the Indenture Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations (including the holding of title to the Trust Estate or any portion thereof in any 45 such jurisdiction) shall be exercised and performed singly by such separate trustee or co-trustee, but solely at the direction of the Indenture Trustee; (ii) no trustee hereunder shall be personally liable by reason of any act or omission of any other trustee hereunder; and (iii) the Indenture Trustee may at any time accept the resignation of or remove any separate trustee or co-trustee. (c) Any notice, request or other writing given to the Indenture Trustee shall be deemed to have been given to each of the then separate trustees and co-trustees, as effectively as if given to each of them. Every instrument appointing any separate trustee or co-trustee shall refer to this Agreement and the conditions of this Article VI. Each separate trustee and co-trustee, upon its acceptance of the trusts conferred, shall be vested with the estates or property specified in its instrument of appointment, either jointly with the Indenture Trustee or separately, as may be provided therein, subject to all the provisions of this Indenture, specifically including every provision of this Indenture relating to the conduct of, affecting the liability of, or affording protection to, the Indenture Trustee. Every such instrument shall be filed with the Indenture Trustee. (d) Any separate trustee or co-trustee may at any time constitute the Indenture Trustee, its agent or attorney-in-fact with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect of this Agreement on its behalf and in its name. If any separate trustee or co-trustee shall die, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Indenture Trustee, to the extent permitted by law, without the appointment of a new or successor trustee. Section 6.11. Eligibility; Disqualification. The Indenture Trustee shall at all times satisfy the requirements of TIA Section 310(a). The Indenture Trustee shall have a combined capital and surplus of at least $50,000,000.00 as set forth in its most recent published annual report of condition, and the time deposits of the Indenture Trustee shall be rated at least A-1 by Standard & Poor's and P-1 by Moody's. The Indenture Trustee shall comply with TIA Section 310(b), including the optional provision permitted by the second sentence of TIA Section 310(b)(9); provided, however, that there shall be excluded from the operation of TIA Section 310(b)(1) any indenture or indentures under which other securities of the Issuer are outstanding if the requirements for such exclusion set forth in TIA Section 310(b)(1) are met. Section 6.12. [Reserved]. Section 6.13. Preferential Collection of Claims Against Issuer. The Indenture Trustee shall comply with TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b). An Indenture Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated. Section 6.14. Waiver of Setoffs. The Indenture Trustee hereby expressly waives any and all rights of setoff that the Indenture Trustee may otherwise at any time have under applicable law with respect to any Trust Account and agrees that amounts in the Trust Accounts 46 shall at all times be held and applied solely in accordance with the provisions hereof and of the other Basic Documents. ARTICLE VII. NOTEHOLDERS' LISTS AND REPORTS Section 7.01. Issuer To Furnish Indenture Trustee Names and Addresses of Noteholders. The Issuer will furnish or cause to be furnished to the Indenture Trustee (a) not more than five days after the earlier of (i) each Record Date and (ii) three months after the last Record Date, a list, in such form as the Indenture Trustee may reasonably require, of the names and addresses of the Holders of Notes as of such Record Date, and (b) at such other times as the Indenture Trustee may request in writing, within 30 days after receipt by the Issuer of any such request, a list of similar form and content as of a date not more than 10 days prior to the time such list is furnished; provided, however, that so long as the Indenture Trustee is the Note Registrar, no such list shall be required to be furnished. Section 7.02. Preservation of Information; Communications to Noteholders. (a) The Indenture Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of the Holders of Notes contained in the most recent list furnished to the Indenture Trustee as provided in Section 7.01 and the names and addresses of Holders of Notes received by the Indenture Trustee in its capacity as Note Registrar. The Indenture Trustee may destroy any list furnished to it as provided in such Section 7.01 upon receipt of a new list so furnished. The Indenture Trustee shall make such list available to the Owner Trustee on written request, and to the Noteholders upon written request of three or more Noteholders or one or more Noteholders evidencing not less than 25% of the Outstanding Amount of the Notes. Upon receipt by the Indenture Trustee of any request by a Noteholder to receive a copy of the current list of Noteholders, the Indenture Trustee shall promptly notify the Administrator thereof by providing to the Administrator a copy of such request and a copy of the list of Noteholders in response thereto. (b) Noteholders may communicate pursuant to TIA Section 312(b) with other Noteholders with respect to their rights under this Indenture or under the Notes. (c) The Issuer, the Indenture Trustee and the Note Registrar shall have the protection of TIA Section 312(c). Section 7.03. Reports by Issuer. (a) The Issuer shall: (i) file with the Indenture Trustee, within 15 days after the Issuer is required (if at all) to file the same with the Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) that the Issuer may be required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act; 47 (ii) file with the Indenture Trustee and the Commission in accordance with rules and regulations prescribed from time to time by the Commission such additional information, documents and reports with respect to compliance by the Issuer with the conditions and covenants of this Indenture as may be required from time to time by such rules and regulations; and (iii) supply to the Indenture Trustee (and the Indenture Trustee shall transmit by mail to all Noteholders described in TIA Section 313(c)) such summaries of any information, documents and reports required to be filed by the Issuer pursuant to clauses (i) and (ii) of this Section 7.03(a) and by rules and regulations prescribed from time to time by the Commission. (b) Unless the Issuer otherwise determines, the fiscal year of the Issuer shall end on December 31 of each year. Section 7.04. Reports by Indenture Trustee. If required by TIA Section 313(a), within 60 days after each March 31, beginning with March 31, 2004, the Indenture Trustee shall mail to each Noteholder as required by TIA Section 313(c) a brief report dated as of such date that complies with TIA Section 313(a). The Indenture Trustee also shall comply with TIA Section 313(b). ARTICLE VIII. ACCOUNTS, DISBURSEMENTS AND RELEASES Section 8.01. Collection of Money. Except as otherwise expressly provided herein, the Indenture Trustee may demand payment or delivery of, and shall receive and collect, directly and without intervention or assistance of any fiscal agent or other intermediary, all money and other property payable to or receivable by the Indenture Trustee pursuant to this Indenture. The Indenture Trustee shall apply all such money received by it as provided in this Indenture. Except as otherwise expressly provided in this Indenture, if any default occurs in the making of any payment or performance under any agreement or instrument that is part of the Trust Estate, the Indenture Trustee may take such action as may be appropriate to enforce such payment or performance, including the institution and prosecution of appropriate Proceedings. Any such action shall be without prejudice to any right to claim a Default or Event of Default under this Indenture and any right to proceed thereafter as provided in Article V. Section 8.02. Trust Accounts. (a) On or prior to the Closing Date, the Issuer shall, or shall cause the Servicer to, establish and maintain, in the name of the Indenture Trustee, for the benefit of the Noteholders the Trust Accounts as provided in Section 5.02 of the Sale and Servicing Agreement. (b) The Issuer shall cause the Servicer to deposit all Available Amounts with respect to the Collection Period preceding such Payment Date in the Collection Account not later than two Business Days after receipt as provided in Section 5.03 and 5.04 of the Sale and Servicing Agreement. However, if each condition to making monthly deposits as may be 48 required by the Sale and Servicing Agreement (including, the satisfaction of specified ratings criteria by the Servicer and the absence of any Servicer Default) is satisfied, the Servicer may retain these amounts until the Business Day immediately preceding the related Payment Date. On or before the Business Day prior to each Payment Date, all amounts required to be withdrawn from the Reserve Account and deposited in the Collection Account pursuant to Section 5.05 of the Sale and Servicing Agreement shall be withdrawn by the Indenture Trustee from the Reserve Account and deposited to the Collection Account as provided therein, as to which Issuer shall cause Servicer to timely provide the related instructions. (c) On each Payment Date, except as provided in Section 5.04(b), the Indenture Trustee (based on the information contained in the Servicer's report delivered on or before the related Determination Date pursuant to Section 4.09 of the Sale and Servicing Agreement) shall make the withdrawals from the Collection Account and make deposits, distributions and payments, to the extent of funds on deposit in the Collection Account with respect to the Collection Period preceding such Payment Date (including funds, if any, deposited therein from the Reserve Account), in accordance with the provisions of Section 5.05(b) of the Sale and Servicing Agreement (as to which Issuer shall cause Servicer to timely provide the related instructions). On each Payment Date, the Indenture Trustee (based on the information contained in the Servicer's report delivered on or before the related Determination Date pursuant to Section 4.09 of the Sale and Servicing Agreement) shall withdraw the funds on deposit in the Interest Distribution Account with respect to the Collection Period preceding such Payment Date and make distributions and payments in the following order of priority: (i) first, to the Noteholders of Class A Notes, the accrued and unpaid interest on the Class A Notes; provided that if there are not sufficient funds available to pay the entire amount of the accrued and unpaid interest on the Class A Notes, the amounts available shall be applied to the payment of such interest on the Class A Notes on a pro rata basis based upon the amount of interest due on each Class of Class A Notes; (ii) second, to the Noteholders of Class B Notes, the accrued and unpaid interest on the Class B Notes; provided that if there are not sufficient funds available to pay the entire amount of the accrued and unpaid interest on the Class B Notes, the amounts available shall be applied to the payment of such interest on the Class B Notes on a pro rata basis; (iii) third, to the Noteholders of Class C Notes, the accrued and unpaid interest on the Class C Notes; provided that if there are not sufficient funds available to pay the entire amount of the accrued and unpaid interest on the Class C Notes, the amounts available shall be applied to the payment of such interest on the Class C Notes on a pro rata basis; and (iv) fourth, to the Noteholders of Class D Notes, the accrued and unpaid interest on the Class D Notes; provided that if there are not sufficient funds available to pay the entire amount of the accrued and unpaid interest on the Class D Notes, the amounts available shall be applied to the payment of such interest on the Class D Notes on a pro rata basis. 49 (d) On each Payment Date, except as provided in Section 5.04(b), the Indenture Trustee (based on the information contained in the Servicer's report delivered on or before the related Determination Date pursuant to Section 4.09 of the Sale and Servicing Agreement) shall withdraw the funds on deposit in the Principal Distribution Account with respect to the Collection Period preceding such Payment Date and make distributions and payments in the following order of priority: (i) first, to the Noteholders of the Class A Notes, the Class A Principal Distributable Amount in the following order of priority: (A) first, to the Noteholders of the Class A-1 Notes in reduction of principal until the principal amount of the Outstanding Class A-1 Notes has been paid in full; provided that if there are not sufficient funds available to pay the principal amount of the Outstanding Class A-1 Notes in full, the amounts available shall be applied to the payment of principal on the Class A-1 Notes on a pro rata basis; (B) second, to the Noteholders of the Class A-2 Notes in reduction of principal until the principal amount of the Outstanding Class A-2 Notes has been paid in full; provided that if there are not sufficient funds available to pay the principal amount of the Outstanding Class A-2 Notes in full, the amounts available shall be applied to the payment of principal on the Class A-2 Notes on a pro rata basis; (C) third, to the Noteholders of the Class A-3 Notes in reduction of principal until the principal amount of the Outstanding Class A-3 Notes has been paid in full; provided that if there are not sufficient funds available to pay the principal amount of the Outstanding Class A-3 Notes in full, the amounts available shall be applied to the payment of principal on the Class A-3 Notes on a pro rata basis; (D) fourth, to the Noteholders of the Class A-4 Notes in reduction of principal until the principal amount of the Outstanding Class A-4 Notes has been paid in full; provided that if there are not sufficient funds available to pay the principal amount of the Outstanding Class A-4 Notes in full, the amounts available shall be applied to the payment of principal on the Class A-4 Notes on a pro rata basis; (ii) second, to the Noteholders of the Class B Notes in reduction of principal, the Class B Principal Distributable Amount until the principal amount of the Outstanding Class B Notes has been paid in full; provided that if there are not sufficient funds available to pay the principal amount of the Outstanding Class B Notes in full, the amounts available shall be applied to the payment of principal on the Class B Notes on a pro rata basis; (iii) third, to the Noteholders of the Class C Notes in reduction of principal, the Class C Principal Distributable Amount until the principal amount of the Outstanding Class C Notes has been paid in full; provided that if there are 50 not sufficient funds available to pay the principal amount of the Outstanding Class C Notes in full, the amounts available shall be applied to the payment of principal on the Class C Notes on a pro rata basis; (iv) fourth, to the Noteholders of the Class D Notes in reduction of principal, the Class D Principal Distributable Amount until the principal amount of the Outstanding Class D Notes has been paid in full; provided that if there are not sufficient funds available to pay the principal amount of the Outstanding Class D Notes in full, the amounts available shall be applied to the payment of principal on the Class D Notes on a pro rata basis; and (v) fifth, to the Certificateholders, any amounts remaining in the Principal Distribution Account. Section 8.03. General Provisions Regarding Accounts. The Indenture Trustee shall not in any way be held liable by reason of any insufficiency in any of the Trust Accounts resulting from any loss on any Eligible Investment included therein except for losses attributable to the Indenture Trustee's failure, in its commercial capacity as principal obligor and not as trustee, to make payments on such Eligible Investments issued by the Indenture Trustee, in its commercial capacity as principal obligor and not as trustee, in accordance with their terms. Section 8.04. Release of Trust Estate. (a) Subject to the payment of its fees and expenses pursuant to Section 6.07, the Indenture Trustee may, and when required by the provisions of this Indenture shall, execute instruments to release property from the lien of this Indenture, or convey the Indenture Trustee's interest in the same, in a manner and under circumstances that are not inconsistent with the provisions of this Indenture. No party relying upon an instrument executed by the Indenture Trustee as provided in this Article VIII shall be bound to ascertain the Indenture Trustee's authority, inquire into the satisfaction of any conditions precedent or see to the application of any moneys. (b) The Indenture Trustee shall, at such time as there are no Notes Outstanding and all sums due the Indenture Trustee pursuant to Section 6.07 have been paid in full, release any remaining portion of the Trust Estate that secured the Notes from the lien of this Indenture and release to the Issuer or any other Person entitled thereto any funds then on deposit in the Trust Accounts. The Indenture Trustee shall release property from the lien of this Indenture pursuant to this Section 8.04(b) only upon receipt by it of an Issuer Request accompanied by an Officer's Certificate, an Opinion of Counsel and (if required by the TIA) Independent Certificates in accordance with TIA Sections 314(c) and 314(d)(1) meeting the applicable requirements of Section 11.01. (c) The Issuer agrees, upon request by the Servicer and representation by the Servicer that it has complied with the procedure in Section 9.01 of the Sale and Servicing Agreement, to render the Issuer Request to the Indenture Trustee in accordance with Section 4.04, and take such other actions as are required in that Section. 51 Section 8.05. Opinion of Counsel. The Indenture Trustee shall receive at least seven days prior written notice when requested by the Issuer to take any action pursuant to Section 8.04(b), accompanied by copies of any instruments involved, and the Indenture Trustee shall also require, as a condition to such action, an Opinion of Counsel, in form and substance satisfactory to the Indenture Trustee, stating the legal effect of any such action, outlining the steps required to complete the same, and concluding that all conditions precedent to the taking of such action have been complied with and such action will not materially and adversely impair the security for the Notes or the rights of the Noteholders in contravention of the provisions of this Indenture; provided, however, that such Opinion of Counsel shall not be required to express an opinion as to the fair value of the Trust Estate. Counsel rendering any such opinion may rely, without independent investigation, on the accuracy and validity of any certificate or other instrument delivered to the Indenture Trustee in connection with any such action. ARTICLE IX. SUPPLEMENTAL INDENTURES Section 9.01. Supplemental Indentures Without Consent of Noteholders. (a) Without the consent of the Holders of any Notes but with prior written notice to the Rating Agencies (with copy to the Indenture Trustee), the Issuer and the Indenture Trustee, when authorized by an Issuer Order and provided with an Issuer Officer's Certificate stating that the supplement will have no material adverse effect on any Noteholder, at any time and from time to time, may enter into one or more supplemental indentures hereto (which shall conform to the provisions of the Trust Indenture Act as in force at the date of the execution thereof), in form satisfactory to the Indenture Trustee, for any of the following purposes: (i) to correct or amplify the description of any property at any time subject to the lien of this Indenture, or better to assure, convey and confirm unto the Indenture Trustee any property subject or required to be subjected to the lien of this Indenture, or to subject to the lien of this Indenture additional property; (ii) to evidence the succession, in compliance with the applicable provisions hereof, of another person to the Issuer, and the assumption by any such successor of the covenants of the Issuer herein and in the Notes contained; (iii) to add to the covenants of the Issuer, for the benefit of the Holders of the Notes, or to surrender any right or power herein conferred upon the Issuer; (iv) to convey, transfer, assign, mortgage or pledge any property to or with the Indenture Trustee; (v) to cure any ambiguity, to correct or supplement any provision herein or in any supplemental indenture that may be inconsistent with any other provision herein or in any supplemental indenture or to make any other provisions with respect to matters or questions arising under this Indenture or in any supplemental indenture; provided, that such action shall not adversely affect the interests of the Holders of the Notes; 52 (vi) to evidence and provide for the acceptance of the appointment hereunder by a successor trustee with respect to the Notes and to add to or change any of the provisions of this Indenture as shall be necessary to facilitate the administration of the trusts hereunder by more than one trustee, pursuant to the requirements of Article VI; or (vii) to modify, eliminate or add to the provisions of this Indenture to such extent as shall be necessary to effect the qualification of this Indenture under the TIA or under any similar federal statute hereafter enacted and to add to this Indenture such other provisions as may be expressly required by the TIA. The Indenture Trustee is hereby authorized to join in the execution of any such supplemental indenture and to make any further appropriate agreements and stipulations that may be therein contained. (b) The Issuer and the Indenture Trustee, when authorized by an Issuer Order, may, also without the consent of any of the Holders of the Notes but with prior notice to the Rating Agencies, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture or of modifying in any manner the rights of the Holders of the Notes under this Indenture; provided, however, that such action shall not, as evidenced by an Opinion of Counsel (which may not be in-house counsel), adversely affect in any material respect the interests of any Noteholder, provided further that such action shall not be deemed to adversely affect in any material respect the interests of any Noteholder and no Opinion of Counsel to that effect shall be required if the person requesting such amendment obtains a letter from the Rating Agencies stating that the amendment would not result in the downgrading or withdrawal of the ratings then assigned to the Notes. Section 9.02. Supplemental Indentures with Consent of Noteholders. The Issuer and the Indenture Trustee, when authorized by an Issuer Order, also may, with prior notice to the Rating Agencies delivered by the Issuer with a copy to the Indenture Trustee and with the consent of the Holders of not less than a majority of the Outstanding Amount of the Notes, by Act of such Holders delivered to the Issuer and the Indenture Trustee, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture or of modifying in any manner the rights of the Holders of the Notes under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Note affected thereby: (i) change the date of payment of any installment of principal of or interest on any Note, or reduce the principal amount thereof, the interest rate thereon or the Redemption Price with respect thereto, change the provisions of this Indenture relating to the application of collections on, or the proceeds of the sale of, the Trust Estate to payment of principal of or interest on the Notes, or change any place of payment where, or the coin or currency in which, any Note or the interest thereon is payable, or impair the right to institute suit for the enforcement of the provisions of this Indenture requiring the application of funds available therefor, as provided in Article V, to the payment of any such amount 53 due on the Notes on or after the respective due dates thereof (or, in the case of redemption, on or after the Redemption Date); (ii) reduce the percentage of the Outstanding Amount of the Notes or the Controlling Class, the consent of the Holders of which is required for any such supplemental indenture, or the consent of the Holders of which is required for any waiver of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences provided for in this Indenture; (iii) modify or alter (x) the provisions of the proviso as to the definition of the term "Outstanding" or (y) the definition of Controlling Class; (iv) reduce the percentage of the Outstanding Amount of the Notes or the Controlling Class of Notes, as applicable, required to direct the Indenture Trustee to direct the Issuer to sell or liquidate the Trust Estate pursuant to Section 5.04; (v) modify any provision of this Section except to increase any percentage specified herein or to provide that certain additional provisions of this Indenture or the Basic Documents cannot be modified or waived without the consent of the Holder of each Outstanding Note affected thereby; (vi) modify any of the provisions of this Indenture in such manner as to affect the calculation of the amount of any payment of interest or principal due on any Note on any Payment Date (including the calculation of any of the individual components of such calculation) or to affect the rights of the Holders of Notes to the benefit of any provisions for the mandatory redemption of the Notes contained herein; or (vii) permit the creation of any lien ranking prior to or on a parity with the lien of this Indenture with respect to any part of the Trust Estate or, except as otherwise permitted or contemplated herein, terminate the lien of this Indenture on any property at any time subject hereto or deprive the Holder of any Note of the security provided by the lien of this Indenture. It shall not be necessary for any Act of Noteholders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof. Promptly after the execution by the Issuer and the Indenture Trustee of any supplemental indenture pursuant to this Section, the Indenture Trustee shall mail to the Holders of the Notes to which such amendment or supplemental indenture relates a notice setting forth in general terms the substance of such supplemental indenture. Any failure of the Indenture Trustee to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture. Section 9.03. Execution of Supplemental Indentures. In executing, or permitting the additional trusts created by, any supplemental indenture permitted by this Article IX or the modification thereby of the trusts created by this Indenture, the Indenture Trustee shall be 54 entitled to receive and shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Indenture Trustee may, but shall not be obligated to, enter into any such supplemental indenture that affects the Indenture Trustee's own rights, duties, liabilities or immunities under this Indenture or otherwise. The Administrator shall provide a fully executed copy of any supplemental indentures to this Indenture to each Rating Agency. Section 9.04. Effect of Supplemental Indenture. Upon the execution of any supplemental indenture pursuant to the provisions hereof, this Indenture shall be and shall be deemed to be modified and amended in accordance therewith with respect to the Notes affected thereby, and the respective rights, limitations of rights, obligations, duties, liabilities and immunities under this Indenture of the Indenture Trustee, the Issuer and the Holders of the Notes shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes. Section 9.05. Reference in Notes to Supplemental Indentures. Notes authenticated and delivered after the execution of any supplemental indenture pursuant to this Article IX may, and if required by the Indenture Trustee shall, bear a notation in form approved by the Indenture Trustee as to any matter provided for in such supplemental indenture. If the Issuer or the Indenture Trustee shall so determine, new Notes so modified as to conform, in the opinion of the Indenture Trustee and the Issuer, to any such supplemental indenture may be prepared and executed by the Issuer and authenticated and delivered by the Indenture Trustee in exchange for Outstanding Notes. Section 9.06. Conformity with Trust Indenture Act. Every amendment of this Indenture and every supplemental indenture executed pursuant to this Article IX shall conform to the requirements of the Trust Indenture Act as then in effect so long as this Indenture shall then be qualified under the Trust Indenture Act. ARTICLE X. REDEMPTION OF NOTES Section 10.01. Redemption. The Notes are subject to redemption in whole, but not in part, at the direction of the Servicer pursuant to Section 9.01 of the Sale and Servicing Agreement, on any Payment Date on which the Servicer exercises its option to purchase the Trust Estate pursuant to said Section 9.01, for a purchase price equal to the Redemption Price; provided, that the Issuer has available funds sufficient to pay the Redemption Price. The Servicer or the Issuer shall furnish the Rating Agencies and the Indenture Trustee notice of such redemption. If the Notes are to be redeemed pursuant to this Section 10.01, the Servicer shall furnish notice of such election to the Indenture Trustee not later than 20 days prior to the Redemption Date and shall deposit the Business Day prior to the Redemption Date with the Indenture Trustee in the Note Distribution Account the Redemption Price of the Notes to be redeemed, whereupon all such Notes shall be due and payable on the Redemption Date upon the furnishing of a notice complying with Section 10.02 to each Holder of the Notes. 55 Section 10.02. Form of Redemption Notice. Notice of redemption under Section 10.01 shall be given by the Indenture Trustee by first-class mail, postage prepaid, or by facsimile mailed or transmitted not later than 10 days prior to the applicable Redemption Date to each Holder of Notes, as of the close of business on the Record Date preceding the applicable Redemption Date, at such Holder's address or facsimile number appearing in the Note Register. All notices of redemption shall state: (i) the Redemption Date; (ii) the Redemption Price; (iii) the place where such Notes are to be surrendered for payment of the Redemption Price (which shall be the office or agency of the Issuer to be maintained as provided in Section 3.02); and (iv) that interest on the Notes shall cease to accrue on the Redemption Date. Notice of redemption of the Notes shall be given by the Indenture Trustee in the name and at the expense of the Issuer. Failure to give notice of redemption, or any defect therein, to any Holder of any Note shall not impair or affect the validity of the redemption of any other Note. Section 10.03. Notes Payable on Redemption Date. The Notes or portions thereof to be redeemed shall, following notice of redemption as required by Section 10.02 (in the case of redemption pursuant to Section 10.01), on the Redemption Date become due and payable at the Redemption Price and (unless the Issuer shall default in the payment of the Redemption Price) no interest shall accrue on the Redemption Price for any period after the date to which accrued interest is calculated for purposes of calculating the Redemption Price. ARTICLE XI. MISCELLANEOUS Section 11.01. Compliance Certificates and Opinions, etc. (a) Upon any application or request by the Issuer to the Indenture Trustee to take any action under any provision of this Indenture, the Issuer shall furnish to the Indenture Trustee (i) an Officer's Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and (ii) an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with and (iii) (if required by the TIA) an Independent Certificate from a firm of certified public accountants meeting the applicable requirements of this Section, except that, in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture, no additional certificate or opinion need be furnished. 56 Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include: (i) a statement that each signatory of such certificate or opinion has read or has caused to be read such covenant or condition and the definitions herein relating thereto; (ii) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (iii) a statement that, in the opinion of each such signatory, such signatory has made such examination or investigation as is necessary to enable such signatory to express an informed opinion as to whether or not such covenant or condition has been complied with; and (iv) a statement as to whether, in the opinion of each such signatory, such condition or covenant has been complied with. (b) (i) Prior to the deposit of any Collateral or other property or securities with the Indenture Trustee that is to be made the basis for the release of any property or securities subject to the lien of this Indenture, the Issuer shall, in addition to any obligation imposed in Section 11.01(a) or elsewhere in this Indenture, furnish to the Indenture Trustee an Officer's Certificate certifying or stating the opinion of each person signing such certificate as to the fair value (within 90 days of such deposit) to the Issuer of the Collateral or other property or securities to be so deposited. (ii) Whenever the Issuer is required to furnish to the Indenture Trustee an Officer's Certificate certifying or stating the opinion of any signer thereof as to the matters described in clause (i) above, the Issuer shall also deliver to the Indenture Trustee an Independent Certificate as to the same matters, if the fair value to the Issuer of the securities to be so deposited and of all other such securities made the basis of any such withdrawal or release since the commencement of the then-current fiscal year of the Issuer, as set forth in the certificates delivered pursuant to clause (i) above and this clause (ii), is 10% or more of the Outstanding Amount of the Notes, but such a certificate need not be furnished with respect to any securities so deposited, if the fair value thereof to the Issuer as set forth in the related Officer's Certificate is less than $25,000 or less than one percent of the Outstanding Amount of the Notes. (iii) Whenever any property or securities are to be released from the lien of this Indenture, the Issuer shall also furnish to the Indenture Trustee an Officer's Certificate certifying or stating the opinion of each person signing such certificate as to the fair value (within 90 days of such release) of the property or securities proposed to be released and stating that in the opinion of such person the proposed release will not impair the security under this Indenture in contravention of the provisions hereof. 57 (iv) Other than with respect to the release of any Purchased Receivable, the Issuer is required to furnish to the Indenture Trustee an Officer's Certificate certifying or stating the opinion of any signer thereof as to the matters described in clause (iii) above, the Issuer shall also furnish to the Indenture Trustee an Independent Certificate as to the same matters if the fair value of the property or securities and of all other property, other than property as contemplated by clause (v) below, or securities released from the lien of this Indenture since the commencement of the then-current calendar year, as set forth in the certificates required by clause (iii) above and this clause (iv), equals 10% or more of the Outstanding Amount of the Notes, but such certificate need not be furnished in the case of any release of property or securities if the fair value thereof as set forth in the related Officer's Certificate is less than $25,000 or less than one percent of the then Outstanding Amount of the Notes. (v) Notwithstanding Section 4.04 or any other provision of this Section, the Issuer may, without compliance with the requirements of the other provisions of this Section, (A) collect, liquidate, sell or otherwise dispose of Receivables and Financed Vehicles as and to the extent permitted or required by the Basic Documents and (B) make cash payments out of the Trust Accounts as and to the extent permitted or required by the Basic Documents. Section 11.02. Form of Documents Delivered to Indenture Trustee. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. Any certificate or opinion of an Authorized Officer of the Issuer may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which such officer's certificate or opinion is based are erroneous. Any such certificate of an Authorized Officer or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Servicer, either Seller, the Issuer or the Administrator, stating that the information with respect to such factual matters is in the possession of the Servicer, the applicable Seller, the Issuer or the Administrator, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous. Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument. Whenever in this Indenture, in connection with any application or certificate or report to the Indenture Trustee, it is provided that the Issuer shall deliver any document as a condition of the granting of such application, or as evidence of the Issuer's compliance with any 58 term hereof, it is intended that the truth and accuracy, at the time of the granting of such application or at the effective date of such certificate or report (as the case may be), of the facts and opinions stated in such document shall in such case be conditions precedent to the right of the Issuer to have such application granted or to the sufficiency of such certificate or report. The foregoing shall not, however, be construed to affect the Indenture Trustee's right to rely upon the truth and accuracy of any statement or opinion contained in any such document as provided in Article VI. Section 11.03. Acts of Noteholders. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Noteholders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Noteholders in person or by agents duly appointed in writing; and except as herein otherwise expressly provided such action shall become effective when such instrument or instruments are delivered to the Indenture Trustee and, where it is hereby expressly required, to the Issuer. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Noteholders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 6.01) conclusive in favor of the Indenture Trustee and the Issuer, if made in the manner provided in this Section. (b) The fact and date of the execution by any person of any such instrument or writing may be proved in any manner that the Indenture Trustee deems sufficient. (c) The ownership of Notes shall be proved by the Note Register. (d) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Notes shall bind the Holder of every Note issued upon the registration thereof or in exchange therefor or in lieu thereof, in respect of anything done, omitted or suffered to be done by the Indenture Trustee or the Issuer in reliance thereon, whether or not notation of such action is made upon such Note. Section 11.04. Notices, etc., to Indenture Trustee, Issuer and Rating Agencies. Any request, demand, authorization, direction, notice, consent, waiver or Act of Noteholders or other documents provided or permitted by this Indenture shall be in writing and, if such request, demand, authorization, direction, notice, consent, waiver or act of Noteholders is to be made upon, given or furnished to or filed with: (i) the Indenture Trustee by any Noteholder or by the Issuer, shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Indenture Trustee at its Corporate Trust Office; or (ii) the Issuer by the Indenture Trustee or by any Noteholder, shall be sufficient for every purpose hereunder if in writing and mailed first-class, postage prepaid to the Issuer addressed to: Hyundai Auto Receivables Trust 2003-A, in care of Wilmington Trust Company, as Owner Trustee, Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890-0001, Attention: 59 Corporate Trust Administration, or at any other address previously furnished in writing to the Indenture Trustee by the Issuer or the Administrator. The Issuer shall promptly transmit any notice received by it from the Noteholders to the Indenture Trustee. Notices required to be given to the Rating Agencies by the Issuer, the Indenture Trustee or the Owner Trustee shall be in writing, personally delivered or mailed by certified mail, return receipt requested, to (i) in the case of Moody's, at the following address: Moody's Investors Service, Inc., ABS Monitoring Department, 99 Church Street, New York, New York 10007; (ii) in the case of Standard & Poor's, at the following address: Standard & Poor's, a division of The McGraw-Hill Companies, Inc., 55 Water Street, New York, New York 10041, Attention of Asset Backed Surveillance Department; and (iii) in the case of Fitch, at the following address: Fitch, Inc., One State Street Plaza, New York, New York 10004; or as to each of the foregoing, at such other address as shall be designated by written notice to the other parties. Section 11.05. Notices to Noteholders; Waiver. Where this Indenture provides for notice to Noteholders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class, postage prepaid to each Noteholder affected by such event, at such Holder's address as it appears on the Note Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. In any case where notice to Noteholders is given by mail, neither the failure to mail such notice nor any defect in any notice so mailed to any particular Noteholder shall affect the sufficiency of such notice with respect to other Noteholders, and any notice that is mailed in the manner herein provided shall conclusively be presumed to have been duly given. Where this Indenture provides for notice in any manner, such notice may be waived in writing by any Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Noteholders shall be filed with the Indenture Trustee but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such a waiver. In case, by reason of the suspension of regular mail service as a result of a strike, work stoppage or similar activity, it shall be impractical to mail notice of any event to Noteholders when such notice is required to be given pursuant to any provision of this Indenture, then any manner of giving such notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a sufficient giving of such notice. Where this Indenture provides for notice to the Rating Agencies, failure to give such notice shall not affect any other rights or obligations created hereunder, and shall not under any circumstance constitute a Default or Event of Default. Section 11.06. Alternate Payment and Notice Provisions. Notwithstanding any provision of this Indenture or any of the Notes to the contrary, the Issuer may enter into any agreement with any Holder of a Note providing for a method of payment, or notice by the Indenture Trustee or any Paying Agent to such Holder, that is different from the methods provided for in this Indenture for such payments or notices. The Issuer will furnish to the Indenture Trustee a copy of each such agreement and the Indenture Trustee will cause payments 60 to be made and notices to be given in accordance with such agreements. The Indenture Trustee shall provide a copy of any request made pursuant to this Section 11.06 to the Owner Trustee. Section 11.07. Effect of Headings and Table of Contents. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. Section 11.08. Successors and Assigns. All covenants and agreements in this Indenture and the Notes by the Issuer shall bind its successors and assigns, whether so expressed or not. All agreements of the Indenture Trustee in this Indenture shall bind its successors, co-trustees and agents. Section 11.09. Separability. In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 11.10. Benefits of Indenture. Nothing in this Indenture or in the Notes, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, and the Noteholders, and any other party secured hereunder, and any other Person with an ownership interest in any part of the Trust Estate, any benefit or any legal or equitable right, remedy or claim under this Indenture. Section 11.11. Legal Holidays. In any case where the date on which any payment is due shall not be a Business Day, then (notwithstanding any other provision of the Notes or this Indenture) payment need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the date on which nominally due, and no interest shall accrue for the period from and after any such nominal date. Section 11.12. GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. Section 11.13. Counterparts. This Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. Section 11.14. Recording of Indenture. If this Indenture is subject to recording in any appropriate public recording offices, such recording is to be effected by the Issuer and at the expense of the Servicer accompanied by an Opinion of Counsel (which may be counsel to the Indenture Trustee or any other counsel reasonably acceptable to the Indenture Trustee) to the effect that such recording is necessary either for the protection of the Noteholders or any other Person secured hereunder or for the enforcement of any right or remedy granted to the Indenture Trustee under this Indenture. Section 11.15. Trust Obligation. No recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under this Indenture or any certificate or other writing delivered in 61 connection herewith or therewith, against (i) the Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuer, including the Seller, or (iii) any partner, owner, beneficiary, agent, officer, director, employee or agent of the Indenture Trustee or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed (it being understood that the Indenture Trustee and the Owner Trustee have no such obligations in their individual capacity). For all purposes of this Indenture, in the performance of any duties or obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of Article VI, VII and VIII of the Trust Agreement. Section 11.16. No Petition. The Indenture Trustee, by entering into this Indenture, and each Noteholder, by accepting a Note, hereby covenant and agree that they will not at any time institute against the Issuer or the Depositor, or join in any institution against the Issuer or the Depositor, of any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the Notes, this Indenture or any of the Basic Documents. Section 11.17. Inspection. The Issuer agrees that, on reasonable prior notice, it will permit any representative of the Indenture Trustee, during the Issuer's normal business hours, to examine all the books of account, records, reports and other papers of the Issuer, to make copies and extracts therefrom, to cause such books to be audited by Independent certified public accountants, and to discuss the Issuer's affairs, finances and accounts with the Issuer's officers, employees and Independent certified public accountants, all at such reasonable times and as often as may be reasonably requested; provided, however, that the Indenture Trustee may only cause the books of the Issuer to be audited on an annual basis, unless there occurs an Event of Default hereunder. The Indenture Trustee shall, and shall cause its representatives to, hold in confidence all such information except to the extent such information is publicly available or such disclosure may be required by law (and all reasonable applications for confidential treatment are unavailing) and except to the extent that the Indenture Trustee may reasonably determine with the advice of counsel and after consultation with the Issuer that such disclosure is consistent with its obligations hereunder. Section 11.18. Conflict with Trust Indenture Act. If any provision hereof limits, qualifies or conflicts with another provision hereof that is required to be included in this Indenture by any of the provisions of the Trust Indenture Act, such required provision shall control. The provisions of TIA Sections 310 through 317 that impose duties on any person (including the provisions automatically deemed included herein unless expressly excluded by this Indenture) are a part of and govern this Indenture, whether or not physically contained herein. Section 11.19. Limitation of Liability. It is expressly understood and agreed by the parties hereto that (a) this Indenture is executed and delivered by Wilmington Trust Company, not individually or personally but solely as Owner Trustee of Hyundai Auto 62 Receivables Trust 2003-A, in the exercise of the powers and authority conferred and vested in it, (b) each of the representations, undertakings and agreements herein made on the part of the Issuer is made and intended not as personal representations, undertakings and agreements by Wilmington Trust Company but is made and intended for the purpose for binding only the Issuer, (c) nothing herein contained shall be construed as creating any liability on Wilmington Trust Company, individually or personally, to perform any covenant either expressed or implied contained herein, all such liability, if any, being expressly waived by the parties hereto and by any Person claiming by, through or under the parties hereto and (d) under no circumstances shall Wilmington Trust Company be personally liable for the payment of any indebtedness or expenses of the Issuer or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Issuer under this Indenture or any other related documents. Section 11.20. Representations and Warranties. The Issuer makes the representations and warranties set forth below with respect to the Receivables, on which the Indenture Trustee relies. Such representations and warranties speak as of the execution and delivery of this Indenture as of the Closing Date, but shall survive the assignment of the Receivables to the Indenture Trustee, and shall not be waived by the Indenture Trustee except in accordance with the terms of this Indenture. (a) This Indenture creates a valid and continuing security interest (as defined in the UCC) in the Receivables in favor of the Indenture Trustee, which security interest is prior to all other Liens, and is enforceable as such against creditors of and purchasers from the Issuer. (b) Each Receivables constitutes "chattel paper" within the meaning of the UCC as in effect in the state of origination (c) Immediately upon the transfer thereof from the Depositor to the Issuer pursuant to the Sale and Servicing Agreement, the Issuer shall have good and marketable title to each Receivable, free and clear of any Lien of any Person. (d) The Issuer has caused, or will have caused, within ten days, the filing of all appropriate financing statements in the proper filling office in the appropriate jurisdiction under the applicable UCC in order to perfect the security interest in the Receivables granted to the Indenture Trustee under this Indenture. (e) Other than the security interest granted to the Indenture Trustee pursuant to this Indenture, the Issuer has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of the Receivables. The Issuer has not authorized the filing of and is not aware of any financing statements against the Issuer that include a description of collateral describing the Receivables other than any financing statement relating to the security interest granted to the Indenture Trustee under this Indenture. The Issuer is not aware of any judgment or tax lien filings against the Issuer. (f) The Contracts that constitute or evidence the Receivables do not have any marks or notations indicating that they have been pledged, assigned or otherwise conveyed to any Person other than the Indenture Trustee, except for such marks or notations indicating that they have been pledged, assigned or otherwise conveyed (i) to the Depositor or the Issuer in 63 accordance with the Basic Documents, (ii) pursuant to the Second Amended and Restated Receivables Purchase Agreement, dated as of July 23, 2002, as amended, among the Seller, Hyundai BC Funding Corporation, Amsterdam Funding Corporation, Asset One Securitization, LLC, Sheffield Receivables Corporation, Societe Generale, ABN AMRO Bank N.V. and Barclays Bank PLC and the Purchase and Sale Agreement dated as of January 17, 2000, as amended between the Seller and Hyundai BC Funding Corporation or (iii) to HMFC in accordance with Dealer Agreements. All financing statements filed or to be filed against the Issuer in favor of the Indenture Trustee in connection with this Indenture describing the Receivables contain a statement to the following effect: "A purchase or security interest in any collateral described in this financing statement will violate the rights of the Indenture Trustee." * * * * * 64 IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused this Indenture to be duly executed by their respective officers, thereunto duly authorized and duly attested, all as of the day and year first above written. HYUNDAI AUTO RECEIVABLES TRUST 2003-A, By: WILMINGTON TRUST COMPANY, not in its individual capacity but solely as Owner Trustee, By: /s/ W. Chris Sponenberg ------------------------------------ Name: W. Chris Sponenberg Title: Vice President WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, not in its individual capacity but solely as Indenture Trustee, By: /s/ Marianna C. Stershic ------------------------------------ Name: Marianna C. Stershic Title: Vice President STATE OF Delaware ) ) ss.: COUNTY OF New Castle ) BEFORE ME, the undersigned authority, a Notary Public in and for said county and state, on this day personally appeared W. Chris Sponenberg, a Vice President of Wilmington Trust Company, not in its individual capacity but solely as Owner Trustee of Hyundai Auto Receivables Trust 2003-A, a Delaware statutory trust (the "Trust") known to me to be the person and officer whose name is subscribed to the foregoing instrument and acknowledged to me that the same was the act of the said Trust, and that s/he executed the same as the act of said statutory trust for the purpose and consideration therein expressed, and in the capacities therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 6th day of November 2003. /s/ Kathleen A. Pedelini - ------------------------------ Notary Public My commission expires: October 31, 2008 STATE OF Minnesota ) ) ss.: COUNTY OF Hennepin ) BEFORE ME, the undersigned authority, a Notary Public in and for said county and state, on this day personally appeared Marianna Stershic, known to me to be the person and officer whose name is subscribed to the foregoing instrument and acknowledged to me that the same was the act of Wells Fargo Bank Minnesota, National Association, national banking association, and that s/he executed the same as the act of said corporation for the purpose and consideration therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 4th day of November 2003. /s/ Melissa Kay Philibert - ------------------------------ Notary Public My commission expires: January 31, 2006 SCHEDULE A [To be Delivered to the Trust at Closing] EXHIBIT A-1 [FORM OF CLASS A-1 NOTE] UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. REGISTERED $170,000,000(1) No. R-_____ CUSIP NO. _______ HYUNDAI AUTO RECEIVABLES TRUST 2003-A 1.11% ASSET BACKED NOTE, CLASS A-1 HYUNDAI AUTO RECEIVABLES TRUST 2003-A, a statutory trust organized and existing under the laws of the State of Delaware (herein referred to as the "Issuer"), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of ONE HUNDRED SEVENTY MILLION DOLLARS, payable on each Payment Date in an amount equal to the aggregate amount, if any, payable from the Note Distribution Account in respect of principal on the Class A-1 Notes pursuant to Section 3.01 of the Indenture dated as of November 7, 2003 (the "Indenture"), between the Issuer and Wells Fargo Bank Minnesota, National Association, a national banking association, as Indenture Trustee (the "Indenture Trustee"); provided, however, that the entire unpaid principal amount of this Note shall be due and payable on November 15, 2004 (the "Class A-1 Maturity Date"). Capitalized terms used but not defined herein are defined in the Indenture, which also contains rules as to construction that shall be applicable herein. The Issuer will pay interest on this Note at the rate per annum set forth above, on each Payment Date until the principal of this Note is paid or made available for payment, on the - ---------- (1) Denominations of $1,000 and integral multiples of $1,000 in excess thereof. A-1-1 principal amount of this Note outstanding on the preceding Payment Date (after giving effect to all payments of principal made on the preceding Payment Date), subject to certain limitations contained in Section 3.01 of the Indenture. Interest on this Note will accrue for each Payment Date on the basis of a 360-day year and the actual number of days from the previous Payment Date (or, in the case of the first Payment Date, from the Closing Date) to but excluding the next Payment Date. Such principal of and interest on this Note shall be paid in the manner specified herein. The principal of and interest on this Note are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. All payments made by the Issuer with respect to this Note shall be applied first to interest due and payable on this Note as provided above and then to the unpaid principal of this Note. Unless the certificate of authentication hereon has been executed by the Indenture Trustee whose name appears below by manual signature, this Note shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose. This Note is one of a duly authorized issue of Notes of the Issuer, designated as its 1.11% Asset Backed Notes, Class A-1 (herein called the "Class A-1 Notes"), all issued under the Indenture, to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Notes. The Class A-1 Notes are subject to all terms of the Indenture. The Class A-1 Notes are and will be secured by the collateral pledged as security therefor as provided in the Indenture. The Class A-1 Notes are senior in right of payment to the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes, the Class B Notes, the Class C Notes and the Class D Notes, to the extent provided in the Indenture. Principal of the Class A-1 Notes will be payable on each Payment Date in an amount described on the face hereof. "Payment Date" means the 15th day of each month, or, if any such date is not a Business Day, the next succeeding Business Day, commencing December 15, 2003. As described above, the entire unpaid principal amount of this Note shall be due and payable on the Class A-1 Maturity Date. Notwithstanding the foregoing, if an Event of Default occurs, the Indenture Trustee or the Holders of Notes representing not less than a majority of the Outstanding Amount of the Controlling Class of Notes may declare the Notes to be immediately due and payable in the manner provided in Section 5.02 of the Indenture. All principal payments on the Class A-1 Notes shall be made pro rata to the Class A-1 Noteholders entitled thereto. Payments of interest on this Note due and payable on each Payment Date, together with the installment of principal, if any, to the extent not in full payment of this Note, shall be made by check mailed to the Person whose name appears as the Registered Holder of this Note (or one or more Predecessor Notes) on the Note Register as of the close of business on each Record Date, except that with respect to Notes registered on the Record Date in the name of A-1-2 the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will be made by wire transfer in immediately available funds to the account designated by such nominee. Such checks shall be mailed to the Person entitled thereto at the address of such Person as it appears on the Note Register as of the applicable Record Date without requiring that this Note be submitted for notation of payment. Any reduction in the principal amount of this Note (or any one or more Predecessor Notes) effected by any payments made on any Payment Date shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon. If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Note on a Payment Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the Registered Holder hereof as of the Record Date preceding such Payment Date by notice mailed or transmitted by facsimile prior to such Payment Date, and the amount then due and payable shall be payable only upon presentation and surrender of this Note at the Indenture Trustee's principal Corporate Trust Office or at the office of the Indenture Trustee's agent appointed for such purposes located in The City of New York. The Issuer shall pay interest on overdue installments of interest at the Class A-1 Rate to the extent lawful. As provided in the Indenture and subject to the limitations set forth therein and on the face hereof, the transfer of this Note may be registered on the Note Register upon surrender of this Note for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by, the Holder hereof or such Holder's attorney duly authorized in writing, with such signature guaranteed by an "eligible guarantor institution" meeting the requirements of the Note Registrar, which requirements include membership or participation in the Securities Transfer Agent's Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended, and thereupon one or more new Notes of authorized denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees. No service charge will be charged for any registration of transfer or exchange of this Note, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange subject to certain exceptions set forth in the Indenture. Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a Note Owner, a beneficial interest in a Note, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under the Indenture or any certificate or other writing delivered in connection therewith, against (i) the Seller, the Servicer, the Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuer, including the Seller or (iii) any partner, owner, beneficiary, agent, officer, director or employee of the Seller, the Servicer, the Indenture Trustee or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Seller, the Servicer, the Owner Trustee or the Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed and except that any A-1-3 such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity. Each Noteholder or Note Owner, by its acceptance of a Note or, in the case of a Note Owner, a beneficial interest in a Note, agrees that, except as expressly provided in the Basic Documents, in the case of an Event of Default under the Indenture, the Noteholder shall have no claim against any of the foregoing for any deficiency, loss or claim therefrom; provided, however, that nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuer for any and all liabilities, obligations and undertakings contained in the Indenture or in this Note. Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a Note Owner, a beneficial interest in a Note, covenants and agrees by accepting the benefits of the Indenture that such Noteholder or Note Owner will not at any time institute against the Issuer or the Depositor, or join in any institution against the Issuer or the Depositor of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the Notes, the Indenture or the other Basic Documents. The Issuer has entered into the Indenture and this Note is issued with the intention that, for purposes of federal and state income tax, franchise tax and any other tax measured in whole or in part by income, the Notes will be characterized as indebtedness secured by the Trust Estate. Each Noteholder, by acceptance of a Note (and each Note Owner by acceptance of a beneficial interest in a Note), agrees to treat the Notes for such purposes as indebtedness. This Note, or any interest therein, may not be transferred to an "employee benefit plan" within the meaning of Section 3(3) of ERISA that is subject to ERISA, a "plan" described in Section 4975(e)(1) of the Code, any entity that is deemed to hold "plan assets" of any of the foregoing by reason of an employee benefit plan's or other plan's investment in such entity, or any governmental, foreign or church plan subject to applicable law that is substantially similar to the fiduciary responsibility provisions of ERISA or Section 4975 of the Code, unless such transferee represents, warrants and covenants that its purchase and holding of this Note, throughout the period that it holds this note is, and will be, covered by Department of Labor prohibited transaction class exemption ("PTE") 90-1; PTE 96-23; PTE 95-60; PTE 91-38; PTE 84-14 or another applicable prohibited transaction exemption (or in the case of a governmental, foreign or church plan subject to law that is substantially similar to ERISA or Section 4975 of the Code, a similar type of exemption or other applicable relief). By its acquisition of this Note in book-entry form or any interest therein, each transferee will be deemed to have represented, warranted and covenanted that it satisfies the foregoing requirements and the Indenture Trustee may relay conclusively on the same for purposes hereof. Prior to the due presentment for registration of transfer of this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Note (as of the day of determination or as of such other date as may be specified in the Indenture) is registered as the owner hereof for all purposes, whether or not this Note be overdue, and none of the Issuer, the Indenture Trustee or any such agent shall be affected by notice to the contrary. A-1-4 The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Notes under the Indenture at any time by the Issuer with the consent of the Holders of Notes or the Controlling Class of Notes, as applicable, representing a majority of the Outstanding Amount of all Notes or Controlling Class of Notes at the time Outstanding. The Indenture also contains provisions permitting Holders of Notes representing specified percentages of the Outstanding Amount of the Controlling Class of Notes, on behalf of the Holders of all the Notes, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note (or any one or more Predecessor Notes) shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Note. The Indenture also permits the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of the Notes issued thereunder. The term "Issuer" as used in this Note includes any successor to the Issuer under the Indenture. The Notes are issuable only in registered form in denominations as provided in the Indenture, subject to certain limitations therein set forth. This Note and the Indenture shall be construed in accordance with the laws of the State of New York, without reference to its conflict of law provisions, and the obligations, rights and remedies of the parties hereunder and thereunder shall be determined in accordance with such laws. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, place and rate, and in the coin or currency herein prescribed. Anything herein to the contrary notwithstanding, except as expressly provided in the Basic Documents, none of Wilmington Trust Company in its individual capacity, Wells Fargo Bank Minnesota, National Association in its individual capacity, any owner of a beneficial interest in the Issuer, the Seller, the Servicer, or any of their respective partners, beneficiaries, agents, officers, directors, employees or successors or assigns shall be personally liable for, nor shall recourse be had to any of them for, the payment of principal of or interest on this Note or performance of, or omission to perform, any of the covenants, obligations or indemnifications contained in the Indenture. The Holder of this Note by its acceptance hereof agrees that, except as expressly provided in the Basic Documents, in the case of an Event of Default under the Indenture, the Holder shall have no claim against any of the foregoing for any deficiency, loss or claim therefrom; provided, however, that nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuer for any and all liabilities, obligations and undertakings contained in the Indenture or in this Note. A-1-5 IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually or in facsimile, by its Authorized Officer, as of the date set forth below. Date: HYUNDAI AUTO RECEIVABLES TRUST 2003-A ------------------- By: WILMINGTON TRUST COMPANY, not in its individual capacity but solely as Owner Trustee under the Trust Agreement, By: ----------------------------- Authorized Signatory TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Notes designated above and referred to in the within-mentioned Indenture. Date: WELLS FARGO BANK MINNESOTA, NATIONAL ------------------- ASSOCIATION, not in its individual capacity but solely as Indenture Trustee, By: --------------------------------- Authorized Signatory A-1-6 ASSIGNMENT Social Security or taxpayer I.D. or other identifying number of assignee: ___________________ FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto: ________________________________________________________________________________ (name and address of assignee) the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints ____________________________________________, attorney, to transfer said Note on the books kept for registration thereof, with full power of substitution in the premises. Dated: */ ------------------ Signature Guaranteed: - ----------------------------- */ NOTICE: The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Note in every particular, without alteration, enlargement or any change whatsoever. Such signature must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Note Registrar, which requirements include membership or participation in STAMP or such other "signature guarantee program" as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. A-1-7 EXHIBIT A-2 [FORM OF CLASS A-2 NOTE] UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. REGISTERED $241,000,000(1) No. R-________ CUSIP NO. _______ HYUNDAI AUTO RECEIVABLES TRUST 2003-A 1.56% ASSET BACKED NOTE, CLASS A-2 HYUNDAI AUTO RECEIVABLES TRUST 2003-A, a statutory trust organized and existing under the laws of the State of Delaware (herein referred to as the "Issuer"), for value received, hereby promises to pay to Cede & Co, or registered assigns, the principal sum of TWO HUNDRED FORTY-ONE MILLION DOLLARS, payable on each Payment Date in an amount equal to the aggregate amount, if any, payable from the Note Distribution Account in respect of principal on the Class A-2 Notes pursuant to Section 3.01 of the Indenture dated as of November 7, 2003 (the "Indenture"), between the Issuer and Wells Fargo Bank Minnesota, National Association, a national banking association, as Indenture Trustee (the "Indenture Trustee"); provided, however, that the entire unpaid principal amount of this Note shall be due and payable on September 15, 2006 (the "Class A-2 Maturity Date"). Capitalized terms used but not defined herein are defined in the Indenture, which also contains rules as to construction that shall be applicable herein. The Issuer will pay interest on this Note at the rate per annum set forth above, on each Payment Date until the principal of this Note is paid or made available for payment, on the - ---------- (1) Denominations of $1,000 and integral multiples of $1,000 in excess thereof. A-2-1 principal amount of this Note outstanding on the preceding Payment Date (after giving effect to all payments of principal made on the preceding Payment Date), subject to certain limitations contained in the last sentence of Section 3.01 of the Indenture. Interest on this Note will accrue for each Payment Date from and including the 15th day of the month preceding the month of such Payment Date (or, in the case of the first Payment Date, from the Closing Date) to but excluding the 15th day of the month of such Payment Date. Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months. Such principal of and interest on this Note shall be paid in the manner specified herein. The principal of and interest on this Note are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. All payments made by the Issuer with respect to this Note shall be applied first to interest due and payable on this Note as provided above and then to the unpaid principal of this Note. Unless the certificate of authentication hereon has been executed by the Indenture Trustee whose name appears below by manual signature, this Note shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose. This Note is one of a duly authorized issue of Notes of the Issuer, designated as its 1.56% Asset Backed Notes, Class A-2 (herein called the "Class A-2 Notes"), all issued under the Indenture, to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Notes. The Class A-2 Notes are subject to all terms of the Indenture. The Class A-2 Notes are and will be secured by the collateral pledged as security therefor as provided in the Indenture. The Class A-2 Notes are subordinated in right of payment to the Class A-1 Notes and are senior in right of payment to the Class A-3 Notes, the Class A-4 Notes, the Class B Notes, the Class C Notes and the Class D Notes, to the extent provided in the Indenture. Principal of the Class A-2 Notes will be payable on each Payment Date in an amount described on the face hereof. "Payment Date" means the 15th day of each month, or, if any such date is not a Business Day, the next succeeding Business Day, commencing December 15, 2003. As described above, the entire unpaid principal amount of this Note shall be due and payable on the Class A-2 Maturity Date. Notwithstanding the foregoing, if an Event of Default occurs, the Indenture Trustee or the Holders of Notes representing not less than a majority of the Outstanding Amount of the Controlling Class of Notes may declare the Notes to be immediately due and payable in the manner provided in Section 5.02 of the Indenture. All principal payments on the Class A-2 Notes shall be made pro rata to the Class A-2 Noteholders entitled thereto. Payments of interest on this Note due and payable on each Payment Date, together with the installment of principal, if any, to the extent not in full payment of this Note, shall be made by check mailed to the Person whose name appears as the Registered Holder of A-2-2 this Note (or one or more Predecessor Notes) on the Note Register as of the close of business on each Record Date, except that with respect to Notes registered on the Record Date in the name of the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will be made by wire transfer in immediately available funds to the account designated by such nominee. Such checks shall be mailed to the Person entitled thereto at the address of such Person as it appears on the Note Register as of the applicable Record Date without requiring that this Note be submitted for notation of payment. Any reduction in the principal amount of this Note (or any one or more Predecessor Notes) effected by any payments made on any Payment Date shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon. If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Note on a Payment Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the Registered Holder hereof as of the Record Date preceding such Payment Date by notice mailed or transmitted by facsimile prior to such Payment Date, and the amount then due and payable shall be payable only upon presentation and surrender of this Note at the Indenture Trustee's principal Corporate Trust Office or at the office of the Indenture Trustee's agent appointed for such purposes located in The City of New York. The Issuer shall pay interest on overdue installments of interest at the Class A-2 Rate to the extent lawful. As provided in the Indenture and subject to the limitations set forth therein and on the face hereof, the transfer of this Note may be registered on the Note Register upon surrender of this Note for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by, the Holder hereof or such Holder's attorney duly authorized in writing, with such signature guaranteed by an eligible guarantor institution' meeting the requirements of the Note Registrar, which requirements include membership or participation in the Securities Transfer Agent's Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended, and thereupon one or more new Notes of authorized denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees. No service charge will be charged for any registration of transfer or exchange of this Note, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange subject to certain exceptions set forth in the Indenture. Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a Note Owner, a beneficial interest in a Note, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under the Indenture or any certificate or other writing delivered in connection therewith, against (i) the Seller, the Servicer, the Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuer, including the Seller or (iii) any partner, owner, beneficiary, agent, officer, director or employee of the Seller, the Servicer, Indenture Trustee or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Seller, the Servicer, the Owner Trustee or the A-2-3 Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity. Each Noteholder or Note Owner, by its acceptance of a Note or, in the case of a Note Owner, a beneficial interest in a Note, agrees that, except as expressly provided in the Basic Documents, in the case of an Event of Default under the Indenture, the Noteholder shall have no claim against any of the foregoing for any deficiency, loss or claim therefrom; provided, however, that nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuer for any and all liabilities, obligations and undertakings contained in the Indenture or in this Note. Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a Note Owner, a beneficial interest in a Note, covenants and agrees by accepting the benefits of the Indenture that such Noteholder or Note Owner will not at any time institute against the Issuer or the Depositor, or join in any institution against the Issuer or the Depositor of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the Notes, the Indenture or the other Basic Documents. The Issuer has entered into the Indenture and this Note is issued with the intention that, for purposes of federal and state income tax, franchise tax and any other tax measured in whole or in part by income, the Notes will be characterized as indebtedness secured by the Trust Estate. Each Noteholder, by acceptance of a Note (and each Note Owner by acceptance of a beneficial interest in a Note), agrees to treat the Notes for such purposes as indebtedness. This Note, or any interest therein, may not be transferred to an "employee benefit plan" within the meaning of Section 3(3) of ERISA that is subject to ERISA, a "plan" described in Section 4975(e)(1) of the Code, any entity that is deemed to hold "plan assets" of any of the foregoing by reason of an employee benefit plan's or other plan's investment in such entity, or any governmental, foreign or church plan subject to applicable law that is substantially similar to the fiduciary responsibility provisions of ERISA or Section 4975 of the Code, unless such transferee represents, warrants and covenants that its purchase and holding of this Note, throughout the period that it holds this note is, and will be, covered by Department of Labor prohibited transaction class exemption ("PTE") 90-1; PTE 96-23; PTE 95-60; PTE 91-38; PTE 84-14 or another applicable prohibited transaction exemption (or in the case of a governmental, foreign or church plan, subject to law that is substantially similar to ERISA or Section 4975 of the Code, a similar type of exemption or other applicable relief). By its acquisition of this Note in book-entry form or any interest therein, each transferee will be deemed to have represented, warranted and covenanted that it satisfies the foregoing requirements and the Indenture Trustee may relay conclusively on the same for purposes hereof. Prior to the due presentment for registration of transfer of this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Note (as of the day of determination or as of such other date as may be specified in the Indenture) is registered as the owner hereof for all purposes, whether or not this Note be overdue, and none of the Issuer, the Indenture Trustee or any such agent shall be affected by notice to the contrary. A-2-4 The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Notes under the Indenture at any time by the Issuer with the consent of the Holders of Notes or the Controlling Class of Notes, as applicable, representing a majority of the Outstanding Amount of all Notes or Controlling Class of Notes at the time Outstanding. The Indenture also contains provisions permitting Holders of Notes representing specified percentages of the Outstanding Amount of the Controlling Class of Notes, on behalf of the Holders of all the Notes, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note (or any one or more Predecessor Notes) shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Note. The Indenture also permits the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of the Notes issued thereunder. The term "Issuer" as used in this Note includes any successor to the Issuer under the Indenture. The Notes are issuable only in registered form in denominations as provided in the Indenture, subject to certain limitations therein set forth. This Note and the Indenture shall be construed in accordance with the laws of the State of New York, without reference to its conflict of law provisions, and the obligations, rights and remedies of the parties hereunder and thereunder shall be determined in accordance with such laws. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, place and rate, and in the coin or currency herein prescribed. Anything herein to the contrary notwithstanding, except as expressly provided in the Basic Documents, none of Wilmington Trust Company in its individual capacity, Wells Fargo Bank Minnesota, National Association in its individual capacity, any owner of a beneficial interest in the Issuer, the Seller, the Servicer, or any of their respective partners, beneficiaries, agents, officers, directors, employees or successors or assigns shall be personally liable for, nor shall recourse be had to any of them for, the payment of principal of or interest on this Note or performance of, or omission to perform, any of the covenants, obligations or indemnifications contained in the Indenture. The Holder of this Note by its acceptance hereof agrees that, except as expressly provided in the Basic Documents, in the case of an Event of Default under the Indenture, the Holder shall have no claim against any of the foregoing for any deficiency, loss or claim therefrom; provided, however, that nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuer for any and all liabilities, obligations and undertakings contained in the Indenture or in this Note. A-2-5 IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually or in facsimile, by its Authorized Officer, as of the date set forth below. Date: HYUNDAI AUTO RECEIVABLES TRUST 2003-A ------------------- By: WILMINGTON TRUST COMPANY, not in its individual capacity but solely as Owner Trustee under the Trust Agreement, By: ------------------------------ Authorized Signatory TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Notes designated above and referred to in the within-mentioned Indenture. Date: WELLS FARGO BANK MINNESOTA, NATIONAL ------------------- ASSOCIATION, not in its individual capacity but solely as Indenture Trustee, By: ------------------------------ Authorized Signatory A-2-6 ASSIGNMENT Social Security or taxpayer I.D. or other identifying number of assignee: __________________ FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto: ________________________________________________________________________________ (name and address of assignee) the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints _________________________________________, attorney, to transfer said Note on the books kept for registration thereof, with full power of substitution in the premises. Dated: */ ------------------ Signature Guaranteed: - ----------------------------- */ NOTICE: The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Note in every particular, without alteration, enlargement or any change whatsoever. Such signature must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Note Registrar, which requirements include membership or participation in STAMP or such other "signature guarantee program" as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. A-2-7 EXHIBIT A-3 [FORM OF CLASS A-3 NOTE] UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. REGISTERD $130,000,000(1) No. R-________ CUSIP NO. _______ HYUNDAI AUTO RECEIVABLES TRUST 2003-A 2.33% ASSET BACKED NOTE, CLASS A-3 HYUNDAI AUTO RECEIVABLES TRUST 2003-A, a statutory trust organized and existing under the laws of the State of Delaware (herein referred to as the "Issuer"), for value received, hereby promises to pay to Cede & Co. or registered assigns, the principal sum of ONE HUNDRED THIRTY MILLION DOLLARS, payable on each Payment Date in an amount equal to the aggregate amount, if any, payable from the Note Distribution Account in respect of principal on the Class A-3 Notes pursuant to Section 3.01 of the Indenture dated as of November 7, 2003 (the "Indenture"), between the Issuer and Wells Fargo Bank Minnesota, National Association, a national banking association, as Indenture Trustee (the "Indenture Trustee"); provided, however, that the entire unpaid principal amount of this Note shall be due and payable on November 15, 2007 (the "Class A-3 Maturity Date"). Capitalized terms used but not defined herein are defined in the Indenture, which also contains rules as to construction that shall be applicable herein. The Issuer will pay interest on this Note at the rate per annum set forth above, on each Payment Date until the principal of this Note is paid or made available for payment, on the - ---------- (1) Denominations of $1,000 and integral multiples of $1,000 in excess thereof. A-3-1 principal amount of this Note outstanding on the preceding Payment Date (after giving effect to all payments of principal made on the preceding Payment Date), subject to certain limitations contained in Section 3.01 of the Indenture. Interest on this Note will accrue for each Payment Date from and including the 15th day of the month preceding the month of such Payment Date (or, in the case of the first Payment Date, from the Closing Date) to but excluding the 15th day of the month of such Payment Date. Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months. Such principal of and interest on this Note shall be paid in the manner specified herein. The principal of and interest on this Note are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. All payments made by the Issuer with respect to this Note shall be applied first to interest due and payable on this Note as provided above and then to the unpaid principal of this Note. Unless the certificate of authentication hereon has been executed by the Indenture Trustee whose name appears below by manual signature, this Note shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose. This Note is one of a duly authorized issue of Notes of the Issuer, designated as its 2.33% Asset Backed Notes, Class A-3 (herein called the "Class A-3 Notes"), all issued under the Indenture, to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Notes. The Class A-3 Notes are subject to all terms of the Indenture. The Class A-3 Notes are and will be secured by the collateral pledged as security therefor as provided in the Indenture. The Class A-3 Notes are subordinated in right of payment to the Class A-1 Notes and the Class A-2 Notes and are senior in right of payment to the Class A-4 Notes, the Class B Notes, the Class C Notes and the Class D Notes, to the extent provided in the Indenture. Principal of the Class A-3 Notes will be payable on each Payment Date in an amount described on the face hereof. "Payment Date" means the 15th day of each month, or, if any such date is not a Business Day, the next succeeding Business Day, commencing December 15, 2003. As described above, the entire unpaid principal amount of this Note shall be due and payable on the Class A-3 Maturity Date. Notwithstanding the foregoing, if an Event of Default occurs, the Indenture Trustee or the Holders of Notes representing not less than a majority of the Outstanding Amount of the Controlling Class of Notes may declare the Notes to be immediately due and payable in the manner provided in Section 5.02 of the Indenture. All principal payments on the Class A-3 Notes shall be made pro rata to the Class A-3 Noteholders entitled thereto. Payments of interest on this Note due and payable on each Payment Date, together with the installment of principal, if any, to the extent not in full payment of this Note, shall be made by check mailed to the Person whose name appears as the Registered Holder of this Note (or one or more Predecessor Notes) on the Note Register as of the close of business on each Record Date, except that with respect to Notes registered on the Record Date in the name of A-3-2 the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will be made by wire transfer in immediately available funds to the account designated by such nominee. Such checks shall be mailed to the Person entitled thereto at the address of such Person as it appears on the Note Register as of the applicable Record Date without requiring that this Note be submitted for notation of payment. Any reduction in the principal amount of this Note (or any one or more Predecessor Notes) effected by any payments made on any Payment Date shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon. If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Note on a Payment Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the Registered Holder hereof as of the Record Date preceding such Payment Date by notice mailed or transmitted by facsimile prior to such Payment Date, and the amount then due and payable shall be payable only upon presentation and surrender of this Note at the Indenture Trustee's principal Corporate Trust Office or at the office of the Indenture Trustee's agent appointed for such purposes located in The City of New York. The Issuer shall pay interest on overdue installments of interest at the Class A-3 Rate to the extent lawful. As provided in the Indenture and subject to the limitations set forth therein and on the face hereof, the transfer of this Note may be registered on the Note Register upon surrender of this Note for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by, the Holder hereof or such Holder's attorney duly authorized in writing, with such signature guaranteed by an "eligible guarantor institution" meeting the requirements of the Note Registrar, which requirements include membership or participation in the Securities Transfer Agent's Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended, and thereupon one or more new Notes of authorized denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees. No service charge will be charged for any registration of transfer or exchange of this Note, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange subject to certain exceptions set forth in the Indenture. Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a Note Owner, a beneficial interest in a Note, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under the Indenture or any certificate or other writing delivered in connection therewith, against (i) the Seller, the Servicer, the Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuer, including the Seller or (iii) any partner, owner, beneficiary, agent, officer, director or employee of the Seller, the Servicer, Indenture Trustee or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Seller, the Servicer, the Owner Trustee or the Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed and except that any A-3-3 such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity. Each Noteholder or Note Owner, by its acceptance of a Note or, in the case of a Note Owner, a beneficial interest in a Note, agrees that, except as expressly provided in the Basic Documents, in the case of an Event of Default under the Indenture, the Noteholder shall have no claim against any of the foregoing for any deficiency, loss or claim therefrom; provided, however, that nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuer for any and all liabilities, obligations and undertakings contained in the Indenture or in this Note. Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a Note Owner, a beneficial interest in a Note, covenants and agrees by accepting the benefits of the Indenture that such Noteholder or Note Owner will not at any time institute against the Issuer or the Depositor, or join in any institution against the Issuer or the Depositor of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the Notes, the Indenture or the other Basic Documents. The Issuer has entered into the Indenture and this Note is issued with the intention that, for purposes of federal and state income tax, franchise tax and any other tax measured in whole or in part by income, the Notes will be characterized as indebtedness secured by the Trust Estate. Each Noteholder, by acceptance of a Note (and each Note Owner by acceptance of a beneficial interest in a Note), agrees to treat the Notes for such purposes as indebtedness. This Note, or any interest therein, may not be transferred to an "employee benefit plan" within the meaning of Section 3(3) of ERISA that is subject to ERISA, a "plan" described in Section 4975(e)(1) of the Code, any entity that is deemed to hold "plan assets" of any of the foregoing by reason of an employee benefit plan's or other plan's investment in such entity, or any governmental, foreign or church plan subject to applicable law that is substantially similar to the fiduciary responsibility provisions of ERISA or Section 4975 of the Code, unless such transferee represents, warrants and covenants that its purchase and holding of this Note, throughout the period that it holds this note is, and will be, covered by Department of Labor prohibited transaction class exemption ("PTE") 90-1; PTE 96-23; PTE 95-60; PTE 91-38; PTE 84-14 or another applicable prohibited transaction exemption (or in the case of a governmental, foreign, or church plan, subject to law that is substantially similar to ERISA or Section 4975 of the Code, a similar type of exemption or other applicable relief). By its acquisition of this Note in book-entry form or any interest therein, each transferee will be deemed to have represented, warranted and covenanted that it satisfies the foregoing requirements and the Indenture Trustee may relay conclusively on the same for purposes hereof. Prior to the due presentment for registration of transfer of this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Note (as of the day of determination or as of such other date as may be specified in the Indenture) is registered as the owner hereof for all purposes, whether or not this Note be overdue, and none of the Issuer, the Indenture Trustee or any such agent shall be affected by notice to the contrary. A-3-4 The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Notes under the Indenture at any time by the Issuer with the consent of the Holders of Notes or the Controlling Class of Notes, as applicable, representing a majority of the Outstanding Amount of all Notes or Controlling Class of Notes at the time Outstanding. The Indenture also contains provisions permitting Holders of Notes representing specified percentages of the Outstanding Amount of the Controlling Class of Notes, on behalf of the Holders of all the Notes, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note (or any one or more Predecessor Notes) shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Note. The Indenture also permits the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of the Notes issued thereunder. The term "Issuer" as used in this Note includes any successor to the Issuer under the Indenture. The Notes are issuable only in registered form in denominations as provided in the Indenture, subject to certain limitations therein set forth. This Note and the Indenture shall be construed in accordance with the laws of the State of New York, without reference to its conflict of law provisions, and the obligations, rights and remedies of the parties hereunder and thereunder shall be determined in accordance with such laws. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, place and rate, and in the coin or currency herein prescribed. Anything herein to the contrary notwithstanding, except as expressly provided in the Basic Documents, none of Wilmington Trust Company in its individual capacity, Wells Fargo Bank Minnesota, National Association in its individual capacity, any owner of a beneficial interest in the Issuer, the Seller, the Servicer, or any of their respective partners, beneficiaries, agents, officers, directors, employees or successors or assigns shall be personally liable for, nor shall recourse be had to any of them for, the payment of principal of or interest on this Note or performance of, or omission to perform, any of the covenants, obligations or indemnifications contained in the Indenture. The Holder of this Note by its acceptance hereof agrees that, except as expressly provided in the Basic Documents, in the case of an Event of Default under the Indenture, the Holder shall have no claim against any of the foregoing for any deficiency, loss or claim therefrom; provided, however, that nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuer for any and all liabilities, obligations and undertakings contained in the Indenture or in this Note. A-3-5 IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually or in facsimile, by its Authorized Officer, as of the date set forth below. Date: HYUNDAI AUTO RECEIVABLES TRUST 2003-A ---------------------- By: WILMINGTON TRUST COMPANY, not in its individual capacity but solely as Owner Trustee under the Trust Agreement, By: ------------------------------------ Authorized Signatory TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Notes designated above and referred to in the within-mentioned Indenture. Date: WELLS FARGO BANK MINNESOTA, ------------------- NATIONAL ASSOCIATION, not in its individual capacity but solely as Indenture Trustee, By: ------------------------------------ Authorized Signatory A-3-6 ASSIGNMENT Social Security or taxpayer I.D. or other identifying number of assignee: ______ FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto: ________________________________________________________________________________ (name and address of assignee) the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints _________________________________________, attorney, to transfer said Note on the books kept for registration thereof, with full power of substitution in the premises. Dated: */ ----------------------- Signature Guaranteed: - ----------------------------- */ NOTICE: The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Note in every particular, without alteration, enlargement or any change whatsoever. Such signature must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Note Registrar, which requirements include membership or participation in STAMP or such other "signature guarantee program" as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. A-3-7 EXHIBIT A-4 [FORM OF CLASS A-4 NOTE] UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. REGISTERED $120,618,000(1) No. R-________ CUSIP NO. _______ HYUNDAI AUTO RECEIVABLES TRUST 2003-A 3.02% ASSET BACKED NOTE, CLASS A-4 HYUNDAI AUTO RECEIVABLES TRUST 2003-A, a statutory trust organized and existing under the laws of the State of Delaware (herein referred to as the "Issuer"), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of ONE HUNDRED TWENTY MILLION SIX HUNDRED EIGHTEEN THOUSAND DOLLARS, payable on each Payment Date in an amount equal to the aggregate amount, if any, payable from the Note Distribution Account in respect of principal on the Class A-4 Notes pursuant to Section 3.01 of the Indenture dated as of November 7, 2003 (the "Indenture"), between the Issuer and Wells Fargo Bank Minnesota, National Association, a national banking association, as Indenture Trustee (the "Indenture Trustee"); provided, however, that the entire unpaid principal amount of this Note shall be due and payable on October 15, 2010 (the "Class A-4 Maturity Date"). Capitalized terms used but not defined herein are defined in the Indenture, which also contains rules as to construction that shall be applicable herein. The Issuer will pay interest on this Note at the rate per annum set forth above, on each Payment Date until the principal of this Note is paid or made available for payment, on the - ---------- (1) Denominations of $1,000 and integral multiples of $1,000 in excess thereof. A-4-1 principal amount of this Note outstanding on the preceding Payment Date (after giving effect to all payments of principal made on the preceding Payment Date), subject to certain limitations contained in the last sentence of Section 3.01 of the Indenture. Interest on this Note will accrue for each Payment Date from and including the 15th day of the month preceding the month of such Payment Date (or, in the case of the first Payment Date, from the Closing Date) to but excluding the 15th day of the month of such Payment Date. Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months. Such principal of and interest on this Note shall be paid in the manner specified herein. The principal of and interest on this Note are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. All payments made by the Issuer with respect to this Note shall be applied first to interest due and payable on this Note as provided above and then to the unpaid principal of this Note. Unless the certificate of authentication hereon has been executed by the Indenture Trustee whose name appears below by manual signature, this Note shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose. This Note is one of a duly authorized issue of Notes of the Issuer, designated as its 3.02% Asset Backed Notes, Class A-4 (herein called the "Class A-4 Notes"), all issued under the Indenture, to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Notes. The Class A-4 Notes are subject to all terms of the Indenture. The Class A-4 Notes are and will be secured by the collateral pledged as security therefor as provided in the Indenture. The Class A-4 Notes are subordinated in right of payment to the Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes and are senior in right of payment to the Class B Notes, the Class C Notes and the Class D Notes, to the extent provided in the Indenture. Principal of the Class A-4 Notes will be payable on each Payment Date in an amount described on the face hereof. "Payment Date" means the 15th day of each month, or, if any such date is not a Business Day, the next succeeding Business Day, commencing December 15, 2003. As described above, the entire unpaid principal amount of this Note shall be due and payable on the Class A-4 Maturity Date. Notwithstanding the foregoing, if an Event of Default occurs, the Indenture Trustee or the Holders of Notes representing not less than a majority of the Outstanding Amount of the Controlling Class of Notes may declare the Notes to be immediately due and payable in the manner provided in Section 5.02 of the Indenture. All principal payments on the Class A-4 Notes shall be made pro rata to the Class A-4 Noteholders entitled thereto. Payments of interest on this Note due and payable on each Payment Date, together with the installment of principal, if any, to the extent not in full payment of this Note, shall be made by check mailed to the Person whose name appears as the Registered Holder of A-4-2 this Note (or one or more Predecessor Notes) on the Note Register as of the close of business on each Record Date, except that with respect to Notes registered on the Record Date in the name of the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will be made by wire transfer in immediately available funds to the account designated by such nominee. Such checks shall be mailed to the Person entitled thereto at the address of such Person as it appears on the Note Register as of the applicable Record Date without requiring that this Note be submitted for notation of payment. Any reduction in the principal amount of this Note (or any one or more Predecessor Notes) effected by any payments made on any Payment Date shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon. If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Note on a Payment Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the Registered Holder hereof as of the Record Date preceding such Payment Date by notice mailed or transmitted by facsimile prior to such Payment Date, and the amount then due and payable shall be payable only upon presentation and surrender of this Note at the Indenture Trustee's principal Corporate Trust Office or at the office of the Indenture Trustee's agent appointed for such purposes located in The City of New York. The Issuer shall pay interest on overdue installments of interest at the Class A-4 Rate to the extent lawful. As provided in the Indenture and subject to the limitations set forth therein and on the face hereof, the transfer of this Note may be registered on the Note Register upon surrender of this Note for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by, the Holder hereof or such Holder's attorney duly authorized in writing, with such signature guaranteed by an eligible guarantor institution' meeting the requirements of the Note Registrar, which requirements include membership or participation in the Securities Transfer Agent's Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended, and thereupon one or more new Notes of authorized denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees. No service charge will be charged for any registration of transfer or exchange of this Note, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange subject to certain exceptions set forth in the Indenture. Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a Note Owner, a beneficial interest in a Note, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under the Indenture or any certificate or other writing delivered in connection therewith, against (i) the Seller, the Servicer, the Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuer, including the Seller or (iii) any partner, owner, beneficiary, agent, officer, director or employee of the Seller, the Servicer, Indenture Trustee or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Seller, the Servicer, the Owner Trustee or the A-4-3 Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity. Each Noteholder or Note Owner, by its acceptance of a Note or, in the case of a Note Owner, a beneficial interest in a Note, agrees that, except as expressly provided in the Basic Documents, in the case of an Event of Default under the Indenture, the Noteholder shall have no claim against any of the foregoing for any deficiency, loss or claim therefrom; provided, however, that nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuer for any and all liabilities, obligations and undertakings contained in the Indenture or in this Note. Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a Note Owner, a beneficial interest in a Note, covenants and agrees by accepting the benefits of the Indenture that such Noteholder or Note Owner will not at any time institute against the Issuer or the Depositor, or join in any institution against the Issuer or the Depositor of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the Notes, the Indenture or the other Basic Documents. The Issuer has entered into the Indenture and this Note is issued with the intention that, for purposes of federal and state income tax, franchise tax and any other tax measured in whole or in part by income, the Notes will be characterized as indebtedness secured by the Trust Estate. Each Noteholder, by acceptance of a Note (and each Note Owner by acceptance of a beneficial interest in a Note), agrees to treat the Notes for such purposes as indebtedness. This Note, or any interest therein, may not be transferred to an "employee benefit plan" within the meaning of Section 3(3) of ERISA that is subject to ERISA, a "plan" described in Section 4975(e)(1) of the Code, any entity that is deemed to hold "plan assets" of any of the foregoing by reason of an employee benefit plan's or other plan's investment in such entity, or any governmental, foreign or church plan subject to applicable law that is substantially similar to the fiduciary responsibility provisions of ERISA or Section 4975 of the Code, unless such transferee represents, warrants and covenants that its purchase and holding of this Note, throughout the period that it holds this note is, and will be, covered by Department of Labor prohibited transaction class exemption ("PTE") 90-1; PTE 96-23; PTE 95-60; PTE 91-38; PTE 84-14 or another applicable prohibited transaction exemption (or in the case of a governmental, foreign or church plan, subject to law that is substantially similar to ERISA or Section 4975 of the Code, a similar type of exemption or other applicable relief). By its acquisition of this Note in book-entry form or any interest therein, each transferee will be deemed to have represented, warranted and covenanted that it satisfies the foregoing requirements and the Indenture Trustee may relay conclusively on the same for purposes hereof. Prior to the due presentment for registration of transfer of this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Note (as of the day of determination or as of such other date as may be specified in the Indenture) is registered as the owner hereof for all purposes, whether or not this Note be overdue, and none of the Issuer, the Indenture Trustee or any such agent shall be affected by notice to the contrary. A-4-4 The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Notes under the Indenture at any time by the Issuer with the consent of the Holders of Notes or the Controlling Class of Notes, as applicable, representing a majority of the Outstanding Amount of all Notes or Controlling Class of Notes at the time Outstanding. The Indenture also contains provisions permitting Holders of Notes representing specified percentages of the Outstanding Amount of the Controlling Class of Notes, on behalf of the Holders of all the Notes, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note (or any one or more Predecessor Notes) shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Note. The Indenture also permits the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of the Notes issued thereunder. The term "Issuer" as used in this Note includes any successor to the Issuer under the Indenture. The Notes are issuable only in registered form in denominations as provided in the Indenture, subject to certain limitations therein set forth. This Note and the Indenture shall be construed in accordance with the laws of the State of New York, without reference to its conflict of law provisions, and the obligations, rights and remedies of the parties hereunder and thereunder shall be determined in accordance with such laws. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, place and rate, and in the coin or currency herein prescribed. Anything herein to the contrary notwithstanding, except as expressly provided in the Basic Documents, none of Wilmington Trust Company in its individual capacity, Wells Fargo Bank Minnesota, National Association in its individual capacity, any owner of a beneficial interest in the Issuer, the Seller, the Servicer, or any of their respective partners, beneficiaries, agents, officers, directors, employees or successors or assigns shall be personally liable for, nor shall recourse be had to any of them for, the payment of principal of or interest on this Note or performance of, or omission to perform, any of the covenants, obligations or indemnifications contained in the Indenture. The Holder of this Note by its acceptance hereof agrees that, except as expressly provided in the Basic Documents, in the case of an Event of Default under the Indenture, the Holder shall have no claim against any of the foregoing for any deficiency, loss or claim therefrom; provided, however, that nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuer for any and all liabilities, obligations and undertakings contained in the Indenture or in this Note. A-4-5 IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually or in facsimile, by its Authorized Officer, as of the date set forth below. Date: HYUNDAI AUTO RECEIVABLES TRUST 2003-A ------------------------ By: WILMINGTON TRUST COMPANY, not in its individual capacity but solely as Owner Trustee under the Trust Agreement, By: ------------------------------------ Authorized Signatory TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Notes designated above and referred to in the within-mentioned Indenture. Date: WELLS FARGO BANK MINNESOTA, ----------------------- NATIONAL ASSOCIATION, not in its individual capacity but solely as Indenture Trustee, By: ------------------------------------ Authorized Signatory A-4-6 ASSIGNMENT Social Security or taxpayer I.D. or other identifying number of assignee: __________________ FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto: ________________________________________________________________________________ (name and address of assignee) the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints _________________________________________, attorney, to transfer said Note on the books kept for registration thereof, with full power of substitution in the premises. Dated: */ ------------------------ Signature Guaranteed: - ----------------------------- */ NOTICE: The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Note in every particular, without alteration, enlargement or any change whatsoever. Such signature must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Note Registrar, which requirements include membership or participation in STAMP or such other "signature guarantee program" as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. A-4-7 EXHIBIT B [FORM OF CLASS B NOTE] UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. REGISTERED $39,034,000(1) No. R-________ CUSIP NO. _______ HYUNDAI AUTO RECEIVABLES TRUST 2003-A 2.99% ASSET BACKED NOTE, CLASS B HYUNDAI AUTO RECEIVABLES TRUST 2003-A, a statutory trust organized and existing under the laws of the State of Delaware (herein referred to as the "Issuer"), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of THIRTY-NINE MILLION THIRTY-FOUR THOUSAND DOLLARS, payable on each Payment Date in an amount equal to the aggregate amount, if any, payable from the Note Distribution Account in respect of principal on the Class B Notes pursuant to Section 3.01 of the Indenture dated as of November 7, 2003 (the "Indenture"), between the Issuer and Wells Fargo Bank Minnesota, National Association, a national banking association, as Indenture Trustee (the "Indenture Trustee"); provided, however, that the entire unpaid principal amount of this Note shall be due and payable on the earlier of October 15, 2010 (the "Class B Maturity Date") and the Redemption Date, if any, pursuant to Section 10.01 of the Indenture. Capitalized terms used but not defined herein are defined in the Indenture, which also contains rules as to construction that shall be applicable herein. - ---------- (1) Denominations of $1,000 and integral multiples of $1,000 in excess thereof. B-1 The Issuer will pay interest on this Note at the rate per annum set forth above, on each Payment Date until the principal of this Note is paid or made available for payment, on the principal amount of this Note outstanding on the preceding Payment Date (after giving effect to all payments of principal made on the preceding Payment Date), subject to certain limitations contained in Section 3.01 of the Indenture. Interest on this Note will accrue for each Payment Date from and including the 15th day of the month preceding the month of such Payment Date (or, in the case of the first Payment Date, from the Closing Date) to but excluding the 15th day of the month of such Payment Date. Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months. Such principal of and interest on this Note shall be paid in the manner specified herein. The principal of and interest on this Note are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. All payments made by the Issuer with respect to this Note shall be applied first to interest due and payable on this Note as provided above and then to the unpaid principal of this Note. Unless the certificate of authentication hereon has been executed by the Indenture Trustee whose name appears below by manual signature, this Note shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose. This Note is one of a duly authorized issue of Notes of the Issuer, designated as its 2.99% Asset Backed Notes, Class B (herein called the "Class B Notes"), all issued under the Indenture, to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Notes. The Class B Notes are subject to all terms of the Indenture. The Class B Notes are and will be secured by the collateral pledged as security therefor as provided in the Indenture. The Class B Notes are subordinated in right of payment to the Class A Notes and are senior in right of payment to the Class C Notes and the Class D Notes, to the extent provided in the Indenture. Principal of the Class B Notes will be payable on each Payment Date in an amount described on the face hereof. "Payment Date" means the 15th day of each month, or, if any such date is not a Business Day, the next succeeding Business Day, commencing December 15, 2003. As described above, the entire unpaid principal amount of this Note shall be due and payable on the Class B Maturity Date. Notwithstanding the foregoing, if an Event of Default occurs, the Indenture Trustee or the Holders of Notes representing not less than a majority of the Outstanding Amount of the Controlling Class of Notes may declare the Notes to be immediately due and payable in the manner provided in Section 5.02 of the Indenture. All principal payments on the Class B Notes shall be made pro rata to the Class B Noteholders entitled thereto. Payments of interest on this Note due and payable on each Payment Date, together with the installment of principal, if any, to the extent not in full payment of this Note, shall be made by check mailed to the Person whose name appears as the Registered Holder of this Note (or one or more Predecessor Notes) on the Note Register as of the close of business on B-2 each Record Date, except that with respect to Notes registered on the Record Date in the name of the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will be made by wire transfer in immediately available funds to the account designated by such nominee. Such checks shall be mailed to the Person entitled thereto at the address of such Person as it appears on the Note Register as of the applicable Record Date without requiring that this Note be submitted for notation of payment. Any reduction in the principal amount of this Note (or any one or more Predecessor Notes) effected by any payments made on any Payment Date shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon. If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Note on a Payment Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the Registered Holder hereof as of the Record Date preceding such Payment Date by notice mailed or transmitted by facsimile prior to such Payment Date, and the amount then due and payable shall be payable only upon presentation and surrender of this Note at the Indenture Trustee's principal Corporate Trust Office or at the office of the Indenture Trustee's agent appointed for such purposes located in The City of New York. The Issuer shall pay interest on overdue installments of interest at the Class B Rate to the extent lawful. As provided in the Indenture and subject to the limitations set forth therein and on the face hereof, the transfer of this Note may be registered on the Note Register upon surrender of this Note for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by, the Holder hereof or such Holder's attorney duly authorized in writing, with such signature guaranteed by an "eligible guarantor institution" meeting the requirements of the Note Registrar, which requirements include membership or participation in the Securities Transfer Agent's Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended, and thereupon one or more new Notes of authorized denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees. No service charge will be charged for any registration of transfer or exchange of this Note, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange subject to certain exceptions set forth in the Indenture. Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a Note Owner, a beneficial interest in a Note, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under the Indenture or any certificate or other writing delivered in connection therewith, against (i) the Seller, the Servicer, the Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuer, including the Seller or (iii) any partner, owner, beneficiary, agent, officer, director or employee of the Seller, the Servicer, Indenture Trustee or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Seller, the Servicer, the Owner Trustee or the Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in B-3 its individual capacity, except as any such Person may have expressly agreed and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity. Each Noteholder or Note Owner, by its acceptance of a Note or, in the case of a Note Owner, a beneficial interest in a Note, agrees that, except as expressly provided in the Basic Documents, in the case of an Event of Default under the Indenture, the Noteholder shall have no claim against any of the foregoing for any deficiency, loss or claim therefrom; provided, however, that nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuer for any and all liabilities, obligations and undertakings contained in the Indenture or in this Note. Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a Note Owner, a beneficial interest in a Note, covenants and agrees by accepting the benefits of the Indenture that such Noteholder or Note Owner will not at any time institute against the Issuer or the Depositor, or join in any institution against the Issuer or the Depositor of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the Notes, the Indenture or the other Basic Documents. The Issuer has entered into the Indenture and this Note is issued with the intention that, for purposes of federal and state income tax, franchise tax and any other tax measured in whole or in part by income, the Notes will be characterized as indebtedness secured by the Trust Estate. Each Noteholder, by acceptance of a Note (and each Note Owner by acceptance of a beneficial interest in a Note), agrees to treat the Notes for such purposes as indebtedness. This Note, or any interest therein, may not be transferred to an "employee benefit plan" within the meaning of Section 3(3) of ERISA that is subject to ERISA, a "plan" described in Section 4975(e)(1) of the Code, any entity that is deemed to hold "plan assets" of any of the foregoing by reason of an employee benefit plan's or other plan's investment in such entity, or any governmental, foreign or church plan subject to applicable law that is substantially similar to the fiduciary responsibility provisions of ERISA or Section 4975 of the Code, unless such transferee represents, warrants and covenants that its purchase and holding of this Note, throughout the period that it holds this note is, and will be, covered by Department of Labor prohibited transaction class exemption ("PTE") 90-1; PTE 96-23; PTE 95-60; PTE 91-38; PTE 84-14 or another applicable prohibited transaction exemption (or in the case of a governmental, foreign or church plan, subject to law that is substantially similar to ERISA or Section 4975 of the Code, a similar type of exemption or other applicable relief). By its acquisition of this Note in book-entry form or any interest therein, each transferee will be deemed to have represented, warranted and covenanted that it satisfies the foregoing requirements and the Indenture Trustee may relay conclusively on the same for purposes hereof. Prior to the due presentment for registration of transfer of this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Note (as of the day of determination or as of such other date as may be specified in the Indenture) is registered as the owner hereof for all purposes, whether or not this Note be overdue, and none of the Issuer, the Indenture Trustee or any such agent shall be affected by notice to the contrary. B-4 The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Notes under the Indenture at any time by the Issuer with the consent of the Holders of Notes or the Controlling Class of Notes, as applicable, representing a majority of the Outstanding Amount of all Notes or Controlling Class of Notes at the time Outstanding. The Indenture also contains provisions permitting Holders of Notes representing specified percentages of the Outstanding Amount of the Controlling Class of Notes, on behalf of the Holders of all the Notes, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note (or any one or more Predecessor Notes) shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Note. The Indenture also permits the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of the Notes issued thereunder. The term "Issuer" as used in this Note includes any successor to the Issuer under the Indenture. The Notes are issuable only in registered form in denominations as provided in the Indenture, subject to certain limitations therein set forth. This Note and the Indenture shall be construed in accordance with the laws of the State of New York, without reference to its conflict of law provisions, and the obligations, rights and remedies of the parties hereunder and thereunder shall be determined in accordance with such laws. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, place and rate, and in the coin or currency herein prescribed. Anything herein to the contrary notwithstanding, except as expressly provided in the Basic Documents, none of Wilmington Trust Company in its individual capacity, Wells Fargo Bank Minnesota, National Association in its individual capacity, any owner of a beneficial interest in the Issuer, the Seller, the Servicer, or any of their respective partners, beneficiaries, agents, officers, directors, employees or successors or assigns shall be personally liable for, nor shall recourse be had to any of them for, the payment of principal of or interest on this Note or performance of, or omission to perform, any of the covenants, obligations or indemnifications contained in the Indenture. The Holder of this Note by its acceptance hereof agrees that, except as expressly provided in the Basic Documents, in the case of an Event of Default under the Indenture, the Holder shall have no claim against any of the foregoing for any deficiency, loss or claim therefrom; provided, however, that nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuer for any and all liabilities, obligations and undertakings contained in the Indenture or in this Note. B-5 IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually or in facsimile, by its Authorized Officer, as of the date set forth below. Date: HYUNDAI AUTO RECEIVABLES TRUST 2003-A ---------------------- By: WILMINGTON TRUST COMPANY, not in its individual capacity but solely as Owner Trustee under the Trust Agreement, By: ------------------------------------ Authorized Signatory TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Notes designated above and referred to in the within-mentioned Indenture. Date: WELLS FARGO BANK MINNESOTA, ----------------------- NATIONAL ASSOCIATION, not in its individual capacity but solely as Indenture Trustee, By: ------------------------------------ Authorized Signatory B-6 ASSIGNMENT Social Security or taxpayer I.D. or other identifying number of assignee: ______ FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto: ________________________________________________________________________________ (name and address of assignee) the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints ____________________________________________, attorney, to transfer said Note on the books kept for registration thereof, with full power of substitution in the premises. Dated: */ --------------------------- Signature Guaranteed: - ---------------------------------- */ NOTICE: The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Note in every particular, without alteration, enlargement or any change whatsoever. Such signature must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Note Registrar, which requirements include membership or participation in STAMP or such other "signature guarantee program" as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. B-7 EXHIBIT C [FORM OF CLASS C NOTE] UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. REGISTERED $11,710,000(1) No. R-________ CUSIP NO. _________ HYUNDAI AUTO RECEIVABLES TRUST 2003-A 3.19% ASSET BACKED NOTE, CLASS C HYUNDAI AUTO RECEIVABLES TRUST 2003-A, a statutory trust organized and existing under the laws of the State of Delaware (herein referred to as the "Issuer"), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of ELEVEN MILLION SEVEN HUNDRED TEN THOUSAND DOLLARS, payable on each Payment Date in an amount equal to the aggregate amount, if any, payable from the Note Distribution Account in respect of principal on the Class C Notes pursuant to Section 3.01 of the Indenture dated as of November 7, 2003 (the "Indenture"), between the Issuer and Wells Fargo Bank Minnesota, National Association, a national banking association, as Indenture Trustee (the "Indenture Trustee"); provided, however, that the entire unpaid principal amount of this Note shall be due and payable on the earlier of October 15, 2010 (the "Class C Maturity Date") and the Redemption Date, if any, pursuant to Section 10.01 of the Indenture. Capitalized terms used but not defined herein are defined in the Indenture, which also contains rules as to construction that shall be applicable herein. - ---------- (1) Denominations of $1,000 and integral multiples of $1,000 in excess thereof. C-1 The Issuer will pay interest on this Note at the rate per annum set forth above, on each Payment Date until the principal of this Note is paid or made available for payment, on the principal amount of this Note outstanding on the preceding Payment Date (after giving effect to all payments of principal made on the preceding Payment Date), subject to certain limitations contained in Section 3.01 of the Indenture. Interest on this Note will accrue for each Payment Date from and including the 15th day of the month preceding the month of such Payment Date (or, in the case of the first Payment Date, from the Closing Date) to but excluding the 15th day of the month of such Payment Date. Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months. Such principal of and interest on this Note shall be paid in the manner specified herein. The principal of and interest on this Note are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. All payments made by the Issuer with respect to this Note shall be applied first to interest due and payable on this Note as provided above and then to the unpaid principal of this Note. Unless the certificate of authentication hereon has been executed by the Indenture Trustee whose name appears below by manual signature, this Note shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose. This Note is one of a duly authorized issue of Notes of the Issuer, designated as its 3.19% Asset Backed Notes, Class C (herein called the "Class C Notes"), all issued under the Indenture, to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Notes. The Class C Notes are subject to all terms of the Indenture. The Class C Notes are and will be secured by the collateral pledged as security therefor as provided in the Indenture. The Class C Notes are subordinated in right of payment to the Class A Notes and the Class B Notes and are senior in right of payment to the Class D Notes, to the extent provided in the Indenture. Principal of the Class C Notes will be payable on each Payment Date in an amount described on the face hereof. "Payment Date" means the 15th day of each month, or, if any such date is not a Business Day, the next succeeding Business Day, commencing December 15, 2003. As described above, the entire unpaid principal amount of this Note shall be due and payable on the earlier of the Class C Maturity Date and the Redemption Date, if any, pursuant to Section 10.01 of the Indenture. Notwithstanding the foregoing, if an Event of Default occurs, the Indenture Trustee or the Holders of Notes representing not less than a majority of the Outstanding Amount of the Controlling Class of Notes may declare the Notes to be immediately due and payable in the manner provided in Section 5.02 of the Indenture. All principal payments on the Class C Notes shall be made pro rata to the Class C Noteholders entitled thereto. Payments of interest on this Note due and payable on each Payment Date, together with the installment of principal, if any, to the extent not in full payment of this Note, shall be made by check mailed to the Person whose name appears as the Registered Holder of C-2 this Note (or one or more Predecessor Notes) on the Note Register as of the close of business on each Record Date, except that with respect to Notes registered on the Record Date in the name of the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will be made by wire transfer in immediately available funds to the account designated by such nominee. Such checks shall be mailed to the Person entitled thereto at the address of such Person as it appears on the Note Register as of the applicable Record Date without requiring that this Note be submitted for notation of payment. Any reduction in the principal amount of this Note (or any one or more Predecessor Notes) effected by any payments made on any Payment Date shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon. If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Note on a Payment Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the Registered Holder hereof as of the Record Date preceding such Payment Date by notice mailed or transmitted by facsimile prior to such Payment Date, and the amount then due and payable shall be payable only upon presentation and surrender of this Note at the Indenture Trustee's principal Corporate Trust Office or at the office of the Indenture Trustee's agent appointed for such purposes located in The City of New York. The Issuer shall pay interest on overdue installments of interest at the Class C Rate to the extent lawful. As provided in the Indenture and subject to the limitations set forth therein and on the face hereof, the transfer of this Note may be registered on the Note Register upon surrender of this Note for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by, the Holder hereof or such Holder's attorney duly authorized in writing, with such signature guaranteed by an "eligible guarantor institution" meeting the requirements of the Note Registrar, which requirements include membership or participation in the Securities Transfer Agent's Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended, and thereupon one or more new Notes of authorized denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees. No service charge will be charged for any registration of transfer or exchange of this Note, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange subject to certain exceptions set forth in the Indenture. Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a Note Owner, a beneficial interest in a Note, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under the Indenture or any certificate or other writing delivered in connection therewith, against (i) the Seller, the Servicer, the Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuer, including the Seller or (iii) any partner, owner, beneficiary, agent, officer, director or employee of the Seller, the Servicer, Indenture Trustee or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Seller, the Servicer, the Owner Trustee or the C-3 Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity. Each Noteholder or Note Owner, by its acceptance of a Note or, in the case of a Note Owner, a beneficial interest in a Note, agrees that, except as expressly provided in the Basic Documents, in the case of an Event of Default under the Indenture, the Noteholder shall have no claim against any of the foregoing for any deficiency, loss or claim therefrom; provided, however, that nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuer for any and all liabilities, obligations and undertakings contained in the Indenture or in this Note. Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a Note Owner, a beneficial interest in a Note, covenants and agrees by accepting the benefits of the Indenture that such Noteholder or Note Owner will not at any time institute against the Issuer or the Depositor, or join in any institution against the Issuer or the Depositor of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the Notes, the Indenture or the other Basic Documents. The Issuer has entered into the Indenture and this Note is issued with the intention that, for purposes of federal and state income tax, franchise tax and any other tax measured in whole or in part by income, the Notes will be characterized as indebtedness secured by the Trust Estate. Each Noteholder, by acceptance of a Note (and each Note Owner by acceptance of a beneficial interest in a Note), agrees to treat the Notes for such purposes as indebtedness. This Note, or any interest therein, may not be transferred to an "employee benefit plan" within the meaning of Section 3(3) of ERISA that is subject to ERISA, a "plan" described in Section 4975(e)(1) of the Code, any entity that is deemed to hold "plan assets" of any of the foregoing by reason of an employee benefit plan's or other plan's investment in such entity, or any governmental, foreign or church plan subject to applicable law that is substantially similar to the fiduciary responsibility provisions of ERISA or Section 4975 of the Code, unless such transferee represents, warrants and covenants that its purchase and holding of this Note, throughout the period that it holds this note is, and will be, covered by Department of Labor prohibited transaction class exemption ("PTE") 90-1; PTE 96-23; PTE 95-60; PTE 91-38; PTE 84-14 or another applicable prohibited transaction exemption (or in the case of a governmental, foreign or church plan, subject to law that is substantially similar to ERISA or Section 4975 of the Code, a similar type of exemption or other applicable relief). By its acquisition of this Note in book-entry form or any interest therein, each transferee will be deemed to have represented, warranted and covenanted that it satisfies the foregoing requirements and the Indenture Trustee may relay conclusively on the same for purposes hereof. Prior to the due presentment for registration of transfer of this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Note (as of the day of determination or as of such other date as may be specified in the Indenture) is registered as the owner hereof for all purposes, whether or not this Note be overdue, and none of the Issuer, the Indenture Trustee or any such agent shall be affected by notice to the contrary. C-4 The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Notes under the Indenture at any time by the Issuer with the consent of the Holders of Notes or the Controlling Class of Notes, as applicable, representing a majority of the Outstanding Amount of all Notes or Controlling Class of Notes at the time Outstanding. The Indenture also contains provisions permitting Holders of Notes representing specified percentages of the Outstanding Amount of the Controlling Class of Notes, on behalf of the Holders of all the Notes, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note (or any one or more Predecessor Notes) shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Note. The Indenture also permits the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of the Notes issued thereunder. The term "Issuer" as used in this Note includes any successor to the Issuer under the Indenture. The Notes are issuable only in registered form in denominations as provided in the Indenture, subject to certain limitations therein set forth. This Note and the Indenture shall be construed in accordance with the laws of the State of New York, without reference to its conflict of law provisions, and the obligations, rights and remedies of the parties hereunder and thereunder shall be determined in accordance with such laws. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, place and rate, and in the coin or currency herein prescribed. Anything herein to the contrary notwithstanding, except as expressly provided in the Basic Documents, none of Wilmington Trust Company in its individual capacity, Wells Fargo Bank Minnesota, National Association in its individual capacity, any owner of a beneficial interest in the Issuer, the Seller, the Servicer, or any of their respective partners, beneficiaries, agents, officers, directors, employees or successors or assigns shall be personally liable for, nor shall recourse be had to any of them for, the payment of principal of or interest on this Note or performance of, or omission to perform, any of the covenants, obligations or indemnifications contained in the Indenture. The Holder of this Note by its acceptance hereof agrees that, except as expressly provided in the Basic Documents, in the case of an Event of Default under the Indenture, the Holder shall have no claim against any of the foregoing for any deficiency, loss or claim therefrom; provided, however, that nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuer for any and all liabilities, obligations and undertakings contained in the Indenture or in this Note. C-5 IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually or in facsimile, by its Authorized Officer, as of the date set forth below. Date: HYUNDAI AUTO RECEIVABLES TRUST 2003-A ---------------------- By: WILMINGTON TRUST COMPANY, not in its individual capacity but solely as Owner Trustee under the Trust Agreement, By: ---------------------------- Authorized Signatory TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Notes designated above and referred to in the within-mentioned Indenture. Date: WELLS FARGO BANK MINNESOTA, ---------------------- NATIONAL ASSOCIATION, not in its individual capacity but solely as Indenture Trustee, By: ---------------------------- Authorized Signatory C-6 ASSIGNMENT Social Security or taxpayer I.D. or other identifying number of assignee: ______ FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto: ________________________________________________________________________________ (name and address of assignee) the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints ____________________________________________, attorney, to transfer said Note on the books kept for registration thereof, with full power of substitution in the premises. Dated: */ --------------------------- Signature Guaranteed: - ---------------------------------- */ NOTICE: The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Note in every particular, without alteration, enlargement or any change whatsoever. Such signature must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Note Registrar, which requirements include membership or participation in STAMP or such other "signature guarantee program" as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. C-7 EXHIBIT D [FORM OF CLASS D NOTE] UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. REGISTERED $40,985,000(1) No. R-________ CUSIP NO. _______ HYUNDAI AUTO RECEIVABLES TRUST 2003-A 4.06% ASSET BACKED NOTE, CLASS D HYUNDAI AUTO RECEIVABLES TRUST 2003-A, a statutory trust organized and existing under the laws of the State of Delaware (herein referred to as the "Issuer"), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of FORTY MILLION NINE HUNDRED EIGHTY-FIVE THOUSAND DOLLARS, payable on each Payment Date in an amount equal to the aggregate amount, if any, payable from the Note Distribution Account in respect of principal on the Class D Notes pursuant to Section 3.01 of the Indenture dated as of November 7, 2003 (the "Indenture"), between the Issuer and Wells Fargo Bank Minnesota, National Association, a national banking association, as Indenture Trustee (the "Indenture Trustee"); provided, however, that the entire unpaid principal amount of this Note shall be due and payable on the earlier of October 15, 2010 (the "Class D Maturity Date") and the Redemption Date, if any, pursuant to Section 10.01 of the Indenture. Capitalized terms used but not defined herein are defined in the Indenture, which also contains rules as to construction that shall be applicable herein. - ---------- (1) Denominations of $1,000 and integral multiples of $1,000 in excess thereof. D-1 The Issuer will pay interest on this Note at the rate per annum set forth above, on each Payment Date until the principal of this Note is paid or made available for payment, on the principal amount of this Note outstanding on the preceding Payment Date (after giving effect to all payments of principal made on the preceding Payment Date), subject to certain limitations contained in Section 3.01 of the Indenture. Interest on this Note will accrue for each Payment Date from and including the 15th day of the month preceding the month of such Payment Date (or, in the case of the first Payment Date, from the Closing Date) to but excluding the 15th day of the month of such Payment Date. Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months. Such principal of and interest on this Note shall be paid in the manner specified herein. The principal of and interest on this Note are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. All payments made by the Issuer with respect to this Note shall be applied first to interest due and payable on this Note as provided above and then to the unpaid principal of this Note. Unless the certificate of authentication hereon has been executed by the Indenture Trustee whose name appears below by manual signature, this Note shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose. This Note is one of a duly authorized issue of Notes of the Issuer, designated as its 4.06% Asset Backed Notes, Class D (herein called the "Class D Notes"), all issued under the Indenture, to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Notes. The Class D Notes are subject to all terms of the Indenture. The Class D Notes are and will be secured by the collateral pledged as security therefor as provided in the Indenture. The Class D Notes are subordinated in right of payment to the Class A Notes, the Class B Notes and the Class C Notes, to the extent provided in the Indenture. Principal of the Class D Notes will be payable on each Payment Date in an amount described on the face hereof. "Payment Date" means the 15th day of each month, or, if any such date is not a Business Day, the next succeeding Business Day, commencing December 15, 2003. As described above, the entire unpaid principal amount of this Note shall be due and payable on the earlier of the Class D Maturity Date and the Redemption Date, if any, pursuant to Section 10.01 of the Indenture. Notwithstanding the foregoing, if an Event of Default occurs, the Indenture Trustee or the Holders of Notes representing not less than a majority of the Outstanding Amount of the Controlling Class of Notes may declare the Notes to be immediately due and payable in the manner provided in Section 5.02 of the Indenture. All principal payments on the Class D Notes shall be made pro rata to the Class D Noteholders entitled thereto. Payments of interest on this Note due and payable on each Payment Date, together with the installment of principal, if any, to the extent not in full payment of this Note, shall be made by check mailed to the Person whose name appears as the Registered Holder of D-2 this Note (or one or more Predecessor Notes) on the Note Register as of the close of business on each Record Date, except that with respect to Notes registered on the Record Date in the name of the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will be made by wire transfer in immediately available funds to the account designated by such nominee. Such checks shall be mailed to the Person entitled thereto at the address of such Person as it appears on the Note Register as of the applicable Record Date without requiring that this Note be submitted for notation of payment. Any reduction in the principal amount of this Note (or any one or more Predecessor Notes) effected by any payments made on any Payment Date shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon. If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Note on a Payment Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the Registered Holder hereof as of the Record Date preceding such Payment Date by notice mailed or transmitted by facsimile prior to such Payment Date, and the amount then due and payable shall be payable only upon presentation and surrender of this Note at the Indenture Trustee's principal Corporate Trust Office or at the office of the Indenture Trustee's agent appointed for such purposes located in The City of New York. The Issuer shall pay interest on overdue installments of interest at the Class D Rate to the extent lawful. As provided in the Indenture and subject to the limitations set forth therein and on the face hereof, the transfer of this Note may be registered on the Note Register upon surrender of this Note for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by, the Holder hereof or such Holder's attorney duly authorized in writing, with such signature guaranteed by an "eligible guarantor institution" meeting the requirements of the Note Registrar, which requirements include membership or participation in the Securities Transfer Agent's Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended, and thereupon one or more new Notes of authorized denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees. No service charge will be charged for any registration of transfer or exchange of this Note, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange subject to certain exceptions set forth in the Indenture. Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a Note Owner, a beneficial interest in a Note, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under the Indenture or any certificate or other writing delivered in connection therewith, against (i) the Seller, the Servicer, the Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuer, including the Seller or (iii) any partner, owner, beneficiary, agent, officer, director or employee of the Seller, the Servicer, Indenture Trustee or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Seller, the Servicer, the Owner Trustee or the D-3 Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity. Each Noteholder or Note Owner, by its acceptance of a Note or, in the case of a Note Owner, a beneficial interest in a Note, agrees that, except as expressly provided in the Basic Documents, in the case of an Event of Default under the Indenture, the Noteholder shall have no claim against any of the foregoing for any deficiency, loss or claim therefrom; provided, however, that nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuer for any and all liabilities, obligations and undertakings contained in the Indenture or in this Note. Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a Note Owner, a beneficial interest in a Note, covenants and agrees by accepting the benefits of the Indenture that such Noteholder or Note Owner will not at any time institute against the Issuer or the Depositor, or join in any institution against the Issuer or the Depositor of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the Notes, the Indenture or the other Basic Documents. The Issuer has entered into the Indenture and this Note is issued with the intention that, for purposes of federal and state income tax, franchise tax and any other tax measured in whole or in part by income, the Notes will be characterized as indebtedness secured by the Trust Estate. Each Noteholder, by acceptance of a Note (and each Note Owner by acceptance of a beneficial interest in a Note), agrees to treat the Notes for such purposes as indebtedness. This Note, or any interest therein, may not be transferred to an "employee benefit plan" within the meaning of Section 3(3) of ERISA that is subject to ERISA, a "plan" described in Section 4975(e)(1) of the Code, any entity that is deemed to hold "plan assets" of any of the foregoing by reason of an employee benefit plan's or other plan's investment in such entity, or any governmental, foreign or church plan subject to applicable law that is substantially similar to the fiduciary responsibility provisions of ERISA or Section 4975 of the Code, unless such transferee represents, warrants and covenants that its purchase and holding of this Note, throughout the period that is holds such note is, and will be, covered by Department of Labor prohibited transaction class exemption ("PTE") 90-1; PTE 96-23; PTE 95-60; PTE 91-38; PTE 84-14 or another applicable prohibited transaction exemption (or in the case of a governmental, foreign or church plan, subject to law that is substantially similar to ERISA or Section 4975 of the Code, a similar type of exemption or other applicable relief). By its acquisition of this Note in book-entry form or any interest therein, each transferee will be deemed to have represented, warranted and covenanted that it satisfies the foregoing requirements and the Indenture Trustee may relay conclusively on the same for purposes hereof. Prior to the due presentment for registration of transfer of this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Note (as of the day of determination or as of such other date as may be specified in the Indenture) is registered as the owner hereof for all purposes, whether or not this Note be overdue, and none of the Issuer, the Indenture Trustee or any such agent shall be affected by notice to the contrary. D-4 The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Notes under the Indenture at any time by the Issuer with the consent of the Holders of Notes or the Controlling Class of Notes, as applicable, representing a majority of the Outstanding Amount of all Notes or Controlling Class of Notes at the time Outstanding. The Indenture also contains provisions permitting Holders of Notes representing specified percentages of the Outstanding Amount of the Controlling Class of Notes, on behalf of the Holders of all the Notes, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note (or any one or more Predecessor Notes) shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Note. The Indenture also permits the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of the Notes issued thereunder. The term "Issuer" as used in this Note includes any successor to the Issuer under the Indenture. The Notes are issuable only in registered form in denominations as provided in the Indenture, subject to certain limitations therein set forth. This Note and the Indenture shall be construed in accordance with the laws of the State of New York, without reference to its conflict of law provisions, and the obligations, rights and remedies of the parties hereunder and thereunder shall be determined in accordance with such laws. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, place and rate, and in the coin or currency herein prescribed. Anything herein to the contrary notwithstanding, except as expressly provided in the Basic Documents, none of Wilmington Trust Company in its individual capacity, Wells Fargo Bank Minnesota, National Association in its individual capacity, any owner of a beneficial interest in the Issuer, the Seller, the Servicer, or any of their respective partners, beneficiaries, agents, officers, directors, employees or successors or assigns shall be personally liable for, nor shall recourse be had to any of them for, the payment of principal of or interest on this Note or performance of, or omission to perform, any of the covenants, obligations or indemnifications contained in the Indenture. The Holder of this Note by its acceptance hereof agrees that, except as expressly provided in the Basic Documents, in the case of an Event of Default under the Indenture, the Holder shall have no claim against any of the foregoing for any deficiency, loss or claim therefrom; provided, however, that nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuer for any and all liabilities, obligations and undertakings contained in the Indenture or in this Note. D-5 IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually or in facsimile, by its Authorized Officer, as of the date set forth below. Date: HYUNDAI AUTO RECEIVABLES TRUST 2003-A -------------------- By: WILMINGTON TRUST COMPANY, not in its individual capacity but solely as Owner Trustee under the Trust Agreement, By: ----------------------------- Authorized Signatory TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Notes designated above and referred to in the within-mentioned Indenture. Date: WELLS FARGO BANK MINNESOTA, -------------------- NATIONAL ASSOCIATION, not in its individual capacity but solely as Indenture Trustee, By: ----------------------------- Authorized Signatory D-6 ASSIGNMENT Social Security or taxpayer I.D. or other identifying number of assignee: ______ FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto: ________________________________________________________________________________ (name and address of assignee) the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints ____________________________________________, attorney, to transfer said Note on the books kept for registration thereof, with full power of substitution in the premises. Dated: */ ------------------- Signature Guaranteed: - ---------------------------------- */ NOTICE: The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Note in every particular, without alteration, enlargement or any change whatsoever. Such signature must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Note Registrar, which requirements include membership or participation in STAMP or such other "signature guarantee program" as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. D-7 EXHIBIT E FORM OF NOTE DEPOSITORY AGREEMENT (Letter of Representations) EX-5 5 ex5-1.txt EXHIBIT 5.1 Exhibit 5.1 LATHAM & WATKINS LLP 53rd at Third 885 Third Avenue New York, New York 10022-4802 Tel: (212) 906-1200 Fax: (212) 751-4864 www.lw.com FIRM / AFFILIATE OFFICES Boston New Jersey Brussels New York Chicago Northern Virginia Frankfurt Orange County Hamburg Paris Hong Kong San Diego London San Francisco Los Angeles Silicon Valley Milan Singapore Moscow Tokyo Washington, D.C. November 7, 2003 To: The Persons Listed on Schedule I hereto Re: Hyundai Motor Finance Company and Hyundai ABS Funding Corporation Ladies and Gentlemen: We have acted as special counsel to Hyundai Motor Finance Company, a California corporation ("HMFC") and Hyundai ABS Funding Corporation, a Delaware corporation (the "Depositor" and, together with HMFC, the "Companies"), in connection with (i) that certain Receivables Purchase Agreement dated as of November 7, 2003 (the "Receivables Purchase Agreement") between HMFC and the Depositor, (ii) that certain Sale and Servicing Agreement dated as of November 7, 2003 (the "Sale and Servicing Agreement") among Hyundai Auto Receivables Trust 2003-A (the "Issuer"), the Depositor, HMFC and Wells Fargo Bank Minnesota, National Association, (iii) that certain Amended and Restated Trust Agreement dated as of November 7, 2003 (the "Trust Agreement") among the Depositor, HMFC, as Owner Trust Administrator (the "Administrator"), and Wilmington Trust Company, as Owner Trustee (the "Owner Trustee") and the issuance by Hyundai Auto Receivables Trust 2003-A (the "Issuer") of $753,347,000 Asset Backed Notes, Series 2003-A (the "Notes") pursuant to the Indenture dated as of November 7, 2003 (the "Indenture") between the Issuer and Wells Fargo Bank Minnesota, National Association (the "Indenture Trustee"). This opinion is rendered to you pursuant to Sections 7(f) and (i) of the Underwriting Agreement dated October 29, 2003 (the "Underwriting Agreement") among the Companies and Banc One Capital Markets, Inc., as representative of the several underwriters set forth on Schedule I thereto. Capitalized terms defined in the Sale and Servicing Agreement and the Receivables Purchase Agreement, used herein and not otherwise defined herein or in Appendix A hereto, shall have the meanings given them in such agreements. As such counsel, we have examined such matters of fact and questions of law as we have considered appropriate for purposes of this letter, except where a specified fact confirmation procedure is stated to have been performed (in which case we have with your consent performed the stated procedure), and except where a statement is qualified as to knowledge or awareness (in which case we have with your consent made no or limited inquiry as specified below). We have examined, among other things, the following: (a) the registration statement on Form S-3 (Registration No. 333-108545) relating to the Notes, including all amendments thereto (the "Registration Statement"), filed with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Securities Act"); November 7, 2003 Page 2 LATHAM & WATKINS LLP (b) the Prospectus dated October 24, 2003 (the "Base Prospectus") and the Prospectus Supplement dated October 29, 2003 (the "Prospectus Supplement") relating to the Notes (collectively, the "Prospectus"), including the filing thereof pursuant to Rule 424 under the Securities Act; (c) the Underwriting Agreement; (d) the Indenture; (e) the Receivables Purchase Agreement; (f) the Sale and Servicing Agreement; (g) the Trust Agreement; (h) the Owner Trust Administration Agreement dated as of November 7, 2003 (the "Administration Agreement") among the Administrator, the Issuer and the Indenture Trustee; (i) the Securities Account Control Agreement dated as of November 7, 2003 (the "Control Agreement") among the Issuer, the Indenture Trustee and Wells Fargo Bank Minnesota, National Association, as Securities Intermediary; (j) the Reconveyance and Release Agreement dated as of November 7, 2003 (the "HBCF Reconveyance Agreement") among Hyundai BC Funding Corporation ("HBCF"), Societe Generale ("SocGen"), Asset One Securitization, L.L.C., Sheffield Receivables Corporation and Amsterdam Funding Corporation; (k) the Receivables Transfer Agreement dated as of November 7, 2003 (the "HBCF Transfer Agreement") between HMFC and HBCF; (l) a photocopy of the certificate of the Secretary of State of the State of California (the "California Secretary") dated October 24, 2003, together with photocopies of the UCC financing statements listed thereon (collectively, the "HMFC Search Certificate"), listing financing statements naming HMFC as debtor that are on file with the California Secretary (the "California Filing Office") as of October 17, 2003 (a copy of the HMFC Search Certificate is attached hereto as Exhibit I); (m) a photocopy of the certificate of the Secretary of State of the State of Delaware (the "Delaware Secretary") dated October 24, 2003, together with photocopies of the UCC financing statements listed thereon (collectively, the "Depositor Search Certificate"), listing financing statements naming the Depositor as debtor that are on file with the Delaware Secretary (the "Delaware Filing Office" and together with the California Filing Office, the "Filing Offices") as of October 13, 2003 (a copy of the Depositor Search Certificate is attached hereto as Exhibit II); November 7, 2003 Page 3 LATHAM & WATKINS LLP (n) a photocopy of the Form UCC-3 release statement naming HBCF as debtor and SocGen as secured party, together with all schedules and exhibits to such release statement, to be filed in the Delaware Filing Office, a copy of which is attached hereto as Exhibit III (the "SocGen Release Statement"), releasing SocGen's security interest under Form UCC-1 financing statement 2001 0938725 on file in the Delaware Filing Office in the Receivables to be conveyed to HBCF pursuant to the HBCF Reconveyance Agreement; (o) a photocopy of the Form UCC-3 release statement naming HMFC as debtor and HBCF as secured party, together with all schedules and exhibits to such release statement, to be filed in the California Filing Office, a copy of which is attached hereto as Exhibit IV (the "HBCF Release Statement" and, together with the SocGen Release Statement, the "Release Statements"), releasing HBCF's security interest under Form UCC-1 financing statement 0002560858 on file in the California Filing Office in the Receivables to be conveyed to HMFC pursuant to the HBCF Transfer Agreement; (p) a photocopy of the Form UCC-1 financing statement naming HMFC as seller/debtor and the Depositor as buyer/secured party, together with all schedules and exhibits to such financing statement, to be filed in the California Filing Office, a copy of which is attached hereto as Exhibit V (the "HMFC Financing Statement"); (q) a photocopy of the Form UCC-1 financing statement naming the Depositor as seller/debtor and the Issuer as buyer/secured party, together with all schedules and exhibits to such financing statement, to be filed in the Delaware Filing Office, a copy of which is attached hereto as Exhibit VI (the "Depositor Financing Statement" and, together with the Release Statements and the HMFC Financing Statement, the "Financing Statements"); (r) a certificate of an officer of HMFC, a copy of which is attached hereto as Exhibit VII (the "HMFC Officer's Certificate"); (s) a certificate of an officer of the Depositor, a copy of which is attached hereto as Exhibit VIII (the "Depositor Officer's Certificate"); and (t) all correspondence issued by the Commission with respect to the Registration Statement. The agreements referred to in clauses (c) through (i) are referred to herein collectively as the "Transaction Documents." The agreements referred to in clauses (j) and (k) are referred to herein collectively as the "Related Documents" and, together with the Transaction Documents, the "Subject Documents." As used in this opinion, the "California UCC" shall mean the Uniform Commercial Code as now in effect in the State of California, and the "New York UCC" shall mean the Uniform Commercial Code as now in effect in the State of New York. "Applicable UCC" shall mean the New York UCC, the Delaware UCC (as defined below) and/or the California UCC, as applicable. In addition, as used in this letter, certain capitalized terms will have the meanings set forth therefor in Appendix A hereto. November 7, 2003 Page 4 LATHAM & WATKINS LLP With your consent, we have relied upon the foregoing, including the representations and warranties of the Companies in the Subject Documents, and upon certificates of officer(s) of the Companies and of others with respect to certain factual matters. We have not independently verified such factual matters. Whenever a statement herein is qualified by "to the best of our knowledge" or a similar phrase, it is intended to indicate that those attorneys in this firm who have rendered legal services in connection with the transactions contemplated by the Subject Documents do not have current actual knowledge of the inaccuracy of such statement. However, except as otherwise expressly indicated, we have not undertaken any independent investigation to determine the accuracy of any such statement. In our examination, we have assumed the genuineness of all signatures, the legal capacity of all natural persons executing documents, the authenticity of all documents submitted to us as originals, and the conformity to authentic original documents of all documents submitted to us as copies. In addition, we have assumed that the parties to the Subject Documents have not entered into any agreements of which we are unaware which modify the terms of the Subject Documents and have not otherwise expressly or by implication waived, or agreed to any modification of the terms or benefits of the Subject Documents. We are opining herein as to the effect on the subject transactions only of the federal laws of the United States and the internal laws of the State of New York and, with respect to paragraphs 7 and 8 only, the California UCC, except that with respect to our opinions set forth in paragraphs 9 and 10 (as they relate to the Depositor Financing Statement and the Delaware UCC (as defined below)), we are opining as to the effect on the subject transaction only of the Delaware UCC. Except as described in the previous sentence, we express no opinion with respect to the applicability thereto, or the effect thereon, of the laws of any other jurisdiction or, in the case of Delaware, any other laws, or as to any matters of municipal law or the laws of any other local agencies within any state, or any laws which are applicable to the subject transactions or the parties thereto because of the nature or extent of their business. With your permission we have based our opinions set forth in paragraphs 9 and 10 with respect to the Depositor Financing Statement solely upon our review of Article 9 of the Uniform Commercial Code as in effect on the date hereof in the State of Delaware as set forth in the CCH Secured Transactions Guide , as supplemented through October 21, 2003 (without regard to judicial interpretations thereof or any regulations promulgated thereunder), referred to herein as the "Delaware UCC". We call to your attention that we are not licensed to practice in the State of Delaware. Notwithstanding anything to the contrary contained herein, our opinions set forth herein are based upon our consideration of only those statutes, rules and regulations which, in our experience, are normally applicable to receivables purchase and sales transactions, such as the type contemplated by the Transaction Documents; provided that no opinion is expressed as to securities laws (except to the extent stated in paragraphs 12 through 16), tax laws, antitrust or trade regulation laws, insolvency or fraudulent transfer laws, antifraud laws, usury laws, environmental laws, or other laws excluded by customary practice. We express no opinion as to any state or federal laws or regulations applicable to the subject transactions because of the nature or extent of the business of any parties to the Subject Documents. November 7, 2003 Page 5 LATHAM & WATKINS LLP For purposes of this letter, we have assumed, with your permission, that: (1) each of the parties to the Subject Documents (including the Companies and the Issuer) is duly incorporated, validly existing and in good standing under the laws of its respective jurisdiction of organization, qualified to do business in each jurisdiction in which such qualification is required, with the requisite corporate or other organizational power and authority and full legal right to conduct its business as now conducted and to own, or hold under lease, its assets and to execute and deliver the Subject Documents to which it is a party and perform its obligations thereunder; (2) the execution, delivery and performance of the Subject Documents by each of the parties thereto (including the Companies and the Issuer) has been duly authorized by all requisite action on the part of each such party; (3) the Subject Documents have been duly executed and delivered by each of the parties thereto (including the Companies and the Issuer); (4) the Subject Documents constitute the legally valid and binding obligations of each of the parties thereto (other than the Companies and the Issuer with respect to obligations governed by the laws of the State of New York), enforceable against such parties (other than the Companies and the Issuer) in accordance with their respective terms; (5) none of the execution, delivery and performance of any of the Subject Documents by any of the parties thereto (including the Companies and the Issuer) will result in the violation of or contravene or conflict with (i) the certificate or articles of incorporation or bylaws (or other organizational documents) of such party, (ii) any law, rule or regulation binding upon such party (except as expressly provided in our opinion in paragraph 3 below), (iii) any agreement or instrument (including, without limitation, each other Subject Document) to which such party is a party or by which any of its properties or assets are bound (except as expressly provided in our opinion in paragraph 3 below), and (iv) any judicial or administrative judgment, injunction, order or decree that is binding upon such party or its properties or assets; (6) no order, consent, approval, license, authorization, or validation of or filing, recording or registration with, or exemption by, any court, governmental body or authority, or any subdivision thereof is required to authorize or is required in connection with the execution and delivery by any party to any of the Subject Documents, or in connection with the performance of its obligations thereunder or the consummation of the transactions contemplated thereby (except (i) for the filing of the Financing Statements required in order to perfect or otherwise protect the security interests under the Receivables Purchase Agreement, the Sale and Servicing Agreement and the Indenture and (ii) that we do not make such assumption with respect to consents, approvals, authorizations, registrations, November 7, 2003 Page 6 LATHAM & WATKINS LLP declarations or filings to the extent that we express our opinion with respect thereto in paragraph 3 below); and (7) all parties to the Subject Documents have complied with any applicable requirements to file returns and pay taxes. Subject to the foregoing and the other matters set forth herein, and in reliance thereon, it is our opinion that, as of the date hereof: 1. Each Subject Document (other than the Trust Agreement and the Underwriting Agreement as to which we express no opinion) to which each Company or the Issuer is a party constitutes a legally valid and binding obligation of such Company or the Issuer, as the case may be, enforceable against such Company or the Issuer, as the case may be, in accordance with its terms. 2. The Notes, when duly executed and delivered by the Owner Trustee on behalf of the Issuer, authenticated by the Indenture Trustee and delivered and paid for pursuant to the Underwriting Agreement, will constitute legally valid and binding obligations of the Issuer, enforceable against the Issuer in accordance with their terms. 3. The execution and delivery of the Transaction Documents by each Company a party thereto, and the consummation by such Company of the transactions contemplated by the Transaction Documents to which it is a party on the date hereof do not to the best of our knowledge (i) after giving effect to the transactions contemplated by the Related Documents, violate the provisions of the agreements described in Exhibit IX attached hereto (such agreements, the "Conduit Documents"), (ii) violate any federal or New York statute, rule, or regulation applicable to such Company, or (iii) require any consents, approvals, authorizations, registrations, declarations or filings by such Company under any federal or New York statute, rule, or regulation applicable to such Company except filings and recordings required in order to perfect or otherwise protect the security interests under the Transaction Documents. No opinion is expressed in clauses (ii) and (iii) of this paragraph 3 as to the application of Section 547 and 548 of the federal Bankruptcy Code and comparable provisions of state law, or under other laws customarily excluded from such opinions, including any antifraud laws, securities laws, the securities or "blue sky" laws of any State and antitrust or trade regulation laws. 4. The Receivables Purchase Agreement is effective to create a valid security interest, as such term is defined in the New York UCC, in favor of the Depositor in that portion of the collateral described in Section 2.01(a) of the Receivables Purchase Agreement in which HMFC has rights and the transfer thereof pursuant to Section 2.01(a) of the Receivables Purchase Agreement is subject to Article 9 of the New York UCC (the "RPA Assets"). 5. The Sale and Servicing Agreement is effective to create a valid security interest, as such term is defined in the New York UCC, in favor of the Issuer in that portion of November 7, 2003 Page 7 LATHAM & WATKINS LLP the collateral described in Section 2.01 of the Sale and Servicing Agreement in which the Depositor has rights and the transfer thereof pursuant to Section 2.01 of the Sale and Servicing Agreement is subject to Article 9 of the New York UCC (the "SSA Assets"). 6. The Indenture is effective to create a valid security interest in favor of the Indenture Trustee, as such term is defined in the New York UCC, in that portion of the collateral described in the Granting Clause of the Indenture in which the Issuer has rights and which is subject to Article 9 of the New York UCC (the "Indenture Assets" and, together with the RPA Assets and the SSA Assets, the "Transferred Assets"). 7. The HMFC Financing Statement is in appropriate form for filing in the California Filing Office. Insofar as Division 9 of the California UCC is applicable (without regard to conflicts of law principles), upon the proper filing of the HMFC Financing Statement in the California Filing Office, the security interest in favor of the Depositor in the RPA Assets described in the HMFC Financing Statement will be perfected to the extent a security interest in such RPA Assets can be perfected under the California UCC by the filing of a financing statement with the California Filing Office (the "Division 9 Filing RPA Assets"). 8. We call to your attention that the HMFC Search Certificate describes or identifies several financing statements that incorporate by reference lists of receivables that could potentially include the Division 9 Filing RPA Assets (the secured parties under such financing statements, copies of which are attached hereto as Exhibit X (the "HMFC Prior Filings"), being referred to herein as the "HMFC Prior Filers"). We have not independently reviewed any of the lists of receivables incorporated by reference in the HMFC Prior Filings; however, we note that an officer of HMFC has certified in the HMFC Officer's Certificate that, other than the security interests evidenced under Form UCC-1 financing statement 0002560858 described or identified on the HMFC Search Certificate, none of the other HMFC Prior Filings described or identified on the HMFC Search Certificate describe the Division 9 Filing RPA Assets. Other than the HMFC Prior Filers (including, the secured parties under Form UCC-1 financing statement 0002560858), the HMFC Search Certificate identifies no secured party who has filed a financing statement naming HMFC as debtor and describing the Division 9 Filing RPA Assets. 9. The Depositor Financing Statement is in appropriate form for filing in the Delaware Filing Office. Insofar as Article 9 of the Delaware UCC is applicable (without regard to conflicts of law principles), upon the proper filing of the Depositor Financing Statement in the Delaware Filing Office, the security interest in favor of the Issuer in the SSA Assets described in the Depositor Financing Statement will be perfected in that portion of such SSA Assets that can be perfected under the Delaware UCC by the filing of a financing statement with the Delaware Filing Office (the "Article 9 Filing SSA Assets" and, together with the Article 9 Filing RPA Assets, the "Article 9 Filing Assets"). 10. We call to your attention that the Depositor Search Certificate describes or identifies several financing statement that incorporate by reference lists of receivables that could potentially include the Article 9 Filing SSA Assets (the secured parties under such financing statements, copies of which are attached hereto as Exhibit X (the "Depositor Prior Filings"), being referred to herein as the "Depositor Prior Filers"). We have not independently reviewed November 7, 2003 Page 8 LATHAM & WATKINS LLP any of the lists of receivables incorporated by reference in the Depositor Prior Filings; however, we note that an officer of the Depositor has certified in the Depositor Officer's Certificate that none of the Depositor Prior Filings described or identified on the Depositor Search Certificate describe the Article 9 Filing SSA Assets. Other than the Depositor Prior Filers, the Depositor Search Certificate identifies no secured party who has filed a financing statement naming the Depositor as debtor and describing the Article 9 Filing SSA Assets. 11. Assuming the Contracts are created under, and are evidenced solely by, motor vehicle retail installment sale contracts in the form of the contract attached as Exhibit XII hereto, such Contracts are "chattel paper" as defined in Section 9-102(11) of the New York UCC. 12. The Registration Statement has become effective under the Securities Act. To the best of our knowledge, no stop order suspending the effectiveness of the Registration Statement has been issued under the Securities Act and no proceedings therefore have been initiated by the Commission. Any required filing of the Prospectus pursuant to Rule 424 under the Securities Act has been made in accordance with Rule 424 under the Securities Act. The Registration Statement, as of the date it was declared effective, and the Prospectus, as of its date, complied as to form in all material respects with the requirements for registration statements on Form S-3 under the Securities Act and the rules and regulations of the Commission thereunder; it being understood, however, that we express no opinion with respect to Regulation S-T, the Indenture Trustee's Form T-1, or the financial statements, schedules, or other financial data, included in, incorporated by reference in, or omitted from, the Registration Statement or the Prospectus. In passing upon the compliance as to form of the Registration Statement and Prospectus, we have assumed that the statements made therein are correct and complete. 13. The Trust Agreement is not required to be qualified under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). 14. The Indenture has been qualified under the Trust Indenture Act. 15. The Class A-1 Notes are "eligible securities" within the meaning of Rule 2a-7 promulgated under the Investment Company Act of 1940, as amended. 16. The Trust is not, and immediately after giving effect to the sale of the Notes in accordance with the Underwriting Agreement and the application of the proceeds as described in the Prospectus Supplement under the caption "Use of Proceeds," will not be, an "investment company" as such term is defined in the Investment Company Act of 1940, as amended. 17. The provisions of the Control Agreement are effective under the New York UCC to perfect the security interest in favor of the Indenture Trustee in that portion of the Indenture Assets consisting of the securities account maintained with Wells Fargo Bank Minnesota, National Association (the "Securities Intermediary") described in the Control Agreement (the "Securities Account"), assuming (a) the Securities Intermediary's jurisdiction (as determined in accordance with Section 8-110(e) of the New York UCC) is New York, (b) the Securities Account constitutes a "securities account" within the meaning of Section 8-501 of the November 7, 2003 Page 9 LATHAM & WATKINS LLP New York UCC, (c) the Securities Intermediary, with respect to the Securities Account, is acting in its capacity as a "securities intermediary" (as defined in Section 8-102(a)(14) of the New York UCC) and (d) the Control Agreement has been duly authorized, executed and delivered by each of the parties thereto and is the legally valid and binding obligation of such parties. The Indenture Trustee's security interest in the Securities Account has priority over any other security interest in the Securities Account granted by the Issuer assuming no other secured party has control of, and the absence of any other control agreement with respect to, the Securities Account. We express no opinion as to the priority of any security interest in the Securities Account as against any security interest in favor of the Securities Intermediary. 18. The statements in the Prospectus Supplement and the Base Prospectus under the headings "ERISA CONSIDERATIONS," to the extent such statements describe matters of law or legal conclusions with respect thereto, have been prepared or reviewed by us and are correct in all material respects. The opinions expressed in paragraphs 1, 2 and 3 do not include opinions with respect to the creation, validity, perfection or priority of any security interest or lien. The opinions expressed in paragraph 1, 2 and 3 and the opinions expressed in paragraphs 4, 5, 6, 7, 8, 9, 10 and 12 as to the creation, validity, perfection and priority of the security interests and liens referred to therein are further subject to the following limitations, qualifications and exceptions: (i) the effect of bankruptcy, insolvency, reorganization, preference, fraudulent transfer, moratorium or other similar laws now or hereafter in effect relating to or affecting the rights or remedies of creditors generally; (ii) the effect of general principles of equity, whether enforcement is considered in a proceeding in equity or at law (including the possible unavailability of specific performance or injunctive relief), concepts of materiality, reasonableness, good faith and fair dealing, and the discretion of the court before which any proceeding therefor may be brought; (iii) the unenforceability under certain circumstances under law or court decisions of provisions providing for the indemnification of or contribution to a party with respect to a liability where such indemnification or contribution is contrary to public policy; (iv) we express no opinion with respect to the enforceability of (a) consents to, or restrictions upon, judicial relief or, except for provisions by which a party agrees to submit to the jurisdiction of the New York courts in respect of any action or proceeding arising out of or relating to the Subject Documents, jurisdiction or venue; (b) advance waivers of claims, defenses, rights granted by law, or notice, opportunity for hearing, evidentiary requirements, statutes of limitation, trial by jury or at law, or other procedural rights; (c) provisions for exclusivity, election or cumulation of rights or remedies; (d) restrictions upon non-written modifications and waivers; (e) provisions authorizing or validating conclusive or discretionary determinations; (f) grants of setoff rights; (g) the unenforceability of any provision requiring the payment of attorneys' fees, except to the extent that a court determines such fees to be reasonable; (h) proxies, powers and trusts; (i) provisions prohibiting, restricting, or requiring consent to assignment or transfer of any right or property; and (j) provisions for liquidated November 7, 2003 Page 10 LATHAM & WATKINS LLP damages, default interest, late charges, monetary penalties, prepayment or make-whole premiums or other economic remedies; (v) certain rights, remedies and waivers contained in the Subject Documents may be limited or rendered ineffective by applicable California laws or judicial decisions governing such provisions, but such laws or judicial decisions do not render the Subject Documents invalid or unenforceable as a whole; and (vi) we express no opinion as to the validity or enforceability of any provisions for liquidated damages, default interest, late charges, monetary penalties, prepayment or make-whole premiums or other economic remedies and call to your attention the provisions of Sections 1717 and 1717.5 of the California Civil Code, which limit and create obligations for the payment of attorney's fees. The opinions set forth above are also subject to (i) the unenforceability of contractual provisions waiving or varying the rules listed in Section 9-602 of the Applicable UCC, (ii) the unenforceability under certain circumstances of contractual provisions respecting self-help or summary remedies without notice of opportunity for hearing or correction and (iii) the effect of provisions of the Applicable UCC which require a secured party, in any disposition of personal property collateral, to act in good faith and a commercially reasonable manner. In rendering the opinions expressed in paragraph 3 insofar as they require interpretation of the Conduit Documents (i) we have assumed with your permission that all courts of competent jurisdiction would enforce such agreements as written but would apply the internal laws of the State of New York without giving effect to any choice of law provisions contained therein or any choice of law principles which would result in application of the internal laws of any other state, (ii) to the extent that any questions of legality or legal construction have arisen in connection with our review, we have applied the laws of the State of New York in resolving such questions, (iii) we express no opinion with respect to the effect of any action or inaction by HMFC, the Depositor or HBCF, as applicable, under the Subject Documents or the Conduit Documents which may result in a breach or default under any Conduit Document, and (iv) we express no opinion with respect to any matters which require us to perform a mathematical calculation or make a financial or accounting determination. We advise you that certain of the Conduit Documents may be governed by other laws, that such laws may vary substantially from the law assumed to govern for purposes of this opinion, and that this opinion may not be relied upon as to whether or not a breach or default would occur under the law actually governing such Conduit Documents. Our opinions in paragraphs 4, 5, 6, 11 and 17 above are limited to Article 9 of the New York UCC, our opinions in paragraphs 7 and 8 are limited to Division 9 of the California UCC and our opinions in paragraphs 9 and 10 are limited to Article 9 of the Delaware UCC, and therefore those opinion paragraphs, among other things, do not address (i) Collateral of a type not subject to, or excluded from the coverage of, Article 9 of the Delaware UCC or the New York UCC, as applicable, or Division 9 of the California UCC, and (ii) under New York UCC Sections 9-301 and 9-307, what law governs perfection of the security interests granted in the Collateral covered by this opinion. Additionally, November 7, 2003 Page 11 LATHAM & WATKINS LLP (i) we express no opinion with respect to: (a) the priority of any security interest or lien, except as set forth in paragraphs 8, 10 and 17 above; (b) what law governs perfection of a security interest granted in the RPA Assets, the SSA Assets or the Indenture Assets and proceeds thereof; or (c) any agricultural lien or any Transferred Assets that consist of letter-of-credit rights, goods covered by a certificate of title, claims against any government or governmental agency, consumer goods, crops growing or to be grown, timber to be cut, goods which are or are to become fixtures, or as-extracted Transferred Assets; (ii) we assume the descriptions of the RPA Assets contained in, or attached as schedules to, the Receivables Purchase Agreement sufficiently describe the RPA Assets intended to be covered by the Receivables Purchase Agreement, and we express no opinion as to whether the phrases "all personal property" or "all assets" or similarly general phrases would be sufficient to create a valid security interest in the RPA Assets or any particular item or items of the RPA Assets; (iii) we have assumed that HMFC has, or has the power to transfer, "rights" in the RPA Assets and that "value" has been given, as contemplated by Section 9-203 of the New York UCC, and we express no opinion as to the nature or extent of HMFC's rights in or title to any of the RPA Assets; (iv) we assume the descriptions of the SSA Assets contained in, or attached as schedules to, the Sale and Servicing Agreement sufficiently describe the SSA Assets intended to be covered by the Sale and Servicing Agreement, and we express no opinion as to whether the phrases "all personal property" or "all assets" or similarly general phrases would be sufficient to create a valid security interest in the SSA Assets or any particular item or items of the SSA Assets; (v) we have assumed that the Depositor has, or has the power to transfer, "rights" in the SSA Assets and that "value" has been given, as contemplated by Section 9-203 of the New York UCC, and we express no opinion as to the nature or extent of the Depositor's rights in or title to any of the SSA Assets; (vi) we assume the descriptions of the Indenture Assets contained in, or attached as schedules to, the Indenture sufficiently describe the Indenture Assets intended to be covered by the Indenture, and we express no opinion as to whether the phrases "all personal property" or "all assets" or similarly general phrases would be sufficient to create a valid security interest in the Indenture Assets or any particular item or items of the Indenture Assets; (vii) we have assumed that the Issuer has, or has the power to transfer, "rights" in the Indenture Assets and that "value" has been given, as contemplated by Section 9-203 of the November 7, 2003 Page 12 LATHAM & WATKINS LLP New York UCC, and we express no opinion as to the nature or extent of the Issuer's rights in or title to any of the Indenture Assets; (viii) we call to your attention the fact that the perfection of a security interest in "proceeds" (as defined in the Applicable UCC) of Collateral is governed and restricted by Section 9-315 of the Applicable UCC; (ix) we express no opinion regarding the effect of any security interest perfected prior to July 1, 2001 under the New York UCC, the California UCC or the Delaware UCC or outside the New York UCC, the California UCC or the Delaware UCC; (x) we have assumed that the exact legal name of HMFC and the Depositor are as set forth in the copy of the organizational documents delivered pursuant to Section 7(t) of the Underwriting Agreement; (xi) Section 552 of the federal Bankruptcy Code limits the extent to which property acquired by a debtor after the commencement of a case under the federal Bankruptcy Code may be subject to a security interest arising from a security agreement entered into by the debtor before the commencement of such case; (xii) we have assumed that the parties to the Transaction Documents have not expressly or by implication waived, subordinated or agreed to any modification of the perfection or priority of any security interest under the Transaction Documents or agreed to any adverse claim of which we are unaware. (xiii) we express no opinion with respect to any security interest in any of the following types of property which are now or hereafter credited to the Securities Account: (a) any option or similar obligation issued by a clearing corporation to its participants; (b) any commodity contract; (c) an ownership interest evidenced by certificates or stock or other instruments and a leasehold evidenced by a proprietary lease, or either of the foregoing, from a corporation or partnership formed for the purpose of cooperative ownership of real estate; (d) any interest in a trust, partnership or limited liability company; or (e) property of a type constituting financial assets not subject to Article 9 of the New York UCC; (xiv) we call to your attention that under the New York UCC actions taken by the Securities Intermediary or the Indenture Trustee (including amending any agreement relating to the Securities Account in a manner which either (a) eliminates the Indenture Trustee's "control" over the Securities Account, (b) changes the identity of the entitlement holder or (c) changes the law governing the Securities Account) may adversely affect the security interest of the Indenture Trustee; (xv) we call to your attention that the law of a "securities intermediary's jurisdiction" governs, among other things, the rights and duties of a "securities intermediary" and the "entitlement holder" arising out of a "security entitlement" and whether an adverse claim can be asserted against a person who acquires a "security entitlement" from a "securities intermediary" (as each such term is defined in the New York UCC); November 7, 2003 Page 13 LATHAM & WATKINS LLP (xvi) we express no opinion with respect to the effect of Section 9-315 of the New York UCC or any other applicable law with respect to proceeds of any funds or other property credited to the Securities Account to the extent such funds or other property constitute proceeds of the Indenture Assets of either the Indenture Trustee or any other creditor; (xvii) we have assumed that (a) the parties thereto have complied with the Control Agreement in all respects, (b) the Securities Intermediary has satisfied at least one of the conditions set forth in Section 8-501(b) of the New York UCC with respect to the financial assets maintained therein, and (c) the financial assets carried in the Securities Account have been duly endorsed to the Securities Intermediary or in blank as provided in Section 8-501(d) of the New York UCC, and we express no opinion as to the nature or extent of the Securities Intermediary's rights in the financial assets underlying any Security Entitlement; (xviii) we have assumed that the Control Agreement, and no other agreement or understanding with any Person, governs the Indenture Trustee's, the Security Intermediary's and the Issuer's rights and duties with respect to the Securities Account and the financial assets contained therein; (xix) we express no opinion as to the priority of any security interest in a Securities Account as against any lien creditor to the extent that such security interest purports to secure any advances or other obligations other than those that are made without knowledge of the lien or pursuant to a commitment entered into without knowledge of the lien; (xx) we express no opinion with respect to any property subject to a statute, regulation or treaty of the United States whose requirements for a security interest's obtaining priority over the rights of a lien creditor with respect to such property preempt Section 9-310(a) of the New York UCC or the Delaware UCC or Section 9310(a) of the California UCC; and (xxi) we have assumed that there are no effective agreements prohibiting, restricting or conditioning the assignment of any portion of the Transferred Assets and that any conditions for the assignment thereof have been complied with. This letter is furnished only to you and is solely for your benefit in connection with the transactions covered hereby. This letter may not be relied upon by you for any other purpose, or furnished to, assigned to, quoted to or relied upon by any other person, firm or entity for any purpose, without our prior written consent, which may be granted or withheld in our sole discretion. Very truly yours, /s/ Latham & Watkins LLP SCHEDULE I Hyundai ABS Funding Corporation 10550 Talbert Avenue Fountain Valley, California 92708 Hyundai Motor Finance Company 10550 Talbert Avenue Fountain Valley, California 92708 Hyundai Auto Receivables Trust 2003-A Rodney Square North 1100 North Market Street Wilmington, Delaware 19890-0001 Wilmington Trust Company Rodney Square North 1100 North Market Street Wilmington, Delaware 19890-0001 Wells Fargo Bank Minnesota, National Association Sixth and Marquette Avenue MAC N9311-161 Minneapolis, Minnesota 55479 Standard & Poor's 55 Water Street New York, New York 10041 Fitch, Inc. 1 State Street Plaza New York, New York 10004 Moody's Investors Service, Inc. 99 Church Street New York, New York 10017 Banc One Capital Markets, Inc., Individually and as Representative of the Several Underwriters One Bank One Plaza, Mail Suite IL1-0596 Chicago, Illinois 60670 Exhibit I HMFC Search Certificate Exhibit II Depositor Search Certificate Exhibit III SocGen Release Statement Exhibit IV HBCF Release Statement Exhibit V HMFC Financing Statement Exhibit VI Depositor Financing Statement Exhibit VII HMFC Officer's Certificate Exhibit VIII Depositor Officer's Certificate Exhibit IX Conduit Documents Purchase and Sale Agreement dated as of January 17, 2000 (as amended, supplemented or otherwise modified to the date hereof) between HMFC and HBCF. Second Amended and Restated Receivables Purchase Agreement, dated as of July 23, 2002 (as amended, supplemented or otherwise modified to the date hereof) among HMFC, HBCF, Asset One Securitization, LLC, Sheffield Receivables Corporation, Amsterdam Funding Corporation, Barclay's Bank plc, SocGen and ABN AMRO Bank N.V. Exhibit X HMFC Prior Filings Exhibit XI Depositor Prior Filings Exhibit XII Form of Motor Vehicle Retail Installment Sale Contract EX-8 6 ex8-1.txt EXHIBIT 8.1 Exhibit 8.1 LATHAM & WATKINS LLP 53rd at Third 885 Third Avenue New York, New York 10022-4802 Tel: (212) 906-1200 Fax: (212) 751-4864 www.lw.com FIRM / AFFILIATE OFFICES Boston New Jersey Brussels New York Chicago Northern Virginia Frankfurt Orange County Hamburg Paris Hong Kong San Diego London San Francisco Los Angeles Silicon Valley Milan Singapore Moscow Tokyo Washington, D.C. File No. 021832-0023 November 7, 2003 To: The Persons Listed on Schedule I hereto Re: Hyundai Auto Receivables Trust 2003-A Ladies and Gentlemen: I. INTRODUCTION. We have acted as special United States tax counsel to Hyundai Motor Finance Company, a California corporation ("HMFC"), Hyundai ABS Funding Corporation, a Delaware corporation ("HABS"), and Hyundai Auto Receivables Trust 2003-A, a Delaware statutory trust (the "Issuer"), in connection with the issuance and sale by the Issuer of Class A-1 Notes in an aggregate principal amount of $170,000,000, Class A-2 Notes in an aggregate principal amount of $241,000,000, Class A-3 Notes in an aggregate principal amount of $130,000,000, Class A-4 Notes in an aggregate principal amount of $120,618,000, Class B Notes in an aggregate principal amount of $39,034,000, Class C Notes in an aggregate principal amount of $11,710,000 and Class D Notes in an aggregate principal amount of $40,985,000 (collectively, the "Notes"). The Notes are to be issued under an Indenture (the "Indenture"), dated as of November 7, 2003, between the Issuer and Wells Fargo Bank Minnesota, National Association, as Indenture Trustee. The opinions below are rendered to you pursuant to section 7(j) of the Underwriting Agreement dated October 29, 2003 among HABS, HMFC and Banc One Capital Markets, Inc., as representative of the several underwriters set forth on Schedule I thereto. Capitalized terms used and not defined herein have the respective meanings given to them in the Indenture and the Prospectus (as defined below). In arriving at the opinions expressed below, we have examined and relied on originals or copies of certain documents including, but not limited to: 1. the Indenture; 2. the Hyundai ABS Funding Corporation Asset-Backed Securities Prospectus, dated October 24, 2003 (the "Base Prospectus"); 3. the Hyundai Auto Receivables Trust 2003-A Prospectus Supplement, dated October 29, 2003 (the "Prospectus Supplement," and together with the Base Prospectus, the "Prospectus"); November 7, 2003 Page 2 LATHAM & WATKINS LLP 4. the Amended and Restated Trust Agreement, dated as of November 7, 2003, among HABS, Wilmington Trust Company, as Owner Trustee, and HMFC (the "Trust Agreement"); 5. the Sale and Servicing Agreement, dated as of November 7, 2003, among the Issuer, HABS, HMFC and the Indenture Trustee (the "Sale and Servicing Agreement"); 6. the forms of the Notes and the trust certificates (the "Certificates") to be issued by the Issuer; and 7. certain other documents delivered at the closing of the sale of the Notes; as well as such other documents as in our discretion we have deemed necessary, appropriate or relevant as a basis for the opinions set forth below. In such examination, we have assumed the genuineness of all signatures, the legal capacity of all natural persons, the authenticity of all documents submitted to us as originals, the conformity with originals of all documents submitted to us as copies thereof, and the authenticity of the originals of such copies. We have not made an independent investigation of the facts set forth either in the Prospectus or such other documents that we have examined. We have consequently assumed in rendering these opinions that the information presented in such documents or otherwise furnished to us accurately and completely describes, in all material respects, all facts relevant to the Issuer and its activities and the issuance of the Notes. We have further assumed that all parties to the agreements enumerated above will perform in accordance with the terms of such agreements, and that there are no agreements, understandings or arrangements other than those of which we have been informed that would affect our opinions set forth below. Our opinions set forth herein represent and are based on our best judgment regarding the application of United States federal income tax laws arising under the Internal Revenue Code of 1986, as amended, the Treasury regulations promulgated and proposed thereunder, current positions of the Internal Revenue Service ("IRS") contained in published revenue rulings and revenue procedures, current administrative positions of the IRS and existing judicial decisions, all of the foregoing of which are subject to change or revocation, possibly with retroactive effect. In that regard, we note that no activity closely comparable to that contemplated by the Issuer has been the subject of any Treasury regulation, revenue ruling or judicial decision. We express no opinion as to the laws of any jurisdiction other than the federal laws of the United States of America. No rulings will be sought from the IRS with respect to any of the matters discussed herein, and our opinions are not binding upon the IRS or the courts. Thus, there can be no assurance that the IRS will not successfully assert positions contrary to those stated in this opinion letter. Our opinions are also based on certain factual representations and covenants contained in certain Officer's Certificates of HMFC, as Administrator of the Issuer, and HABS, dated the date hereof and attached hereto (the "Officer's Certificates"), including that, based on the assumptions described therein, the present value of the cash flows expected to be available for distribution to holders of the Certificates is approximately $69 million.(1) With respect to any - ---------- (1) See paragraph 7 of the Officer's Certificate of HABS. November 7, 2003 Page 3 LATHAM & WATKINS LLP representations contained in the Officer's Certificates that are qualified by knowledge, we have assumed the accuracy of such representations without respect to such qualifications. Any change occurring after the date hereof in, or a variation from, any of the foregoing bases for our opinions could affect the conclusions expressed below. Nevertheless, we undertake no responsibility to advise you of any new developments in the application or interpretation of the federal income tax law. II. SUMMARY OF THE FACTS. The Issuer. The Issuer is a Delaware statutory trust, established pursuant to a trust agreement and governed by the Trust Agreement. The Issuer may engage in certain limited activities, including the following: (i) issuing the Notes pursuant to the Indenture and issuing the Certificates pursuant to the Trust Agreement; (ii) paying interest and principal on the Notes and distributions on the Certificates; (iii) purchasing a pool of motor vehicle retail installment sale contracts (the "Receivables"); (iv) funding a cash reserve account (the "Reserve Account"); and (v) engaging in certain other necessary or incidental activities including those that may be necessary in connection with conservation of the trust estate and the making of payments to the Certificateholders and the Noteholders.(2) Various contractual arrangements exist to help ensure that the Issuer will not be treated as a corporation for federal income tax purposes. As long as the Certificates are owned by only one Person,(3) the Trust Agreement provides that for federal income tax purposes the Issuer will be treated as a grantor trust or disregarded as an entity separate from its owner.(4) If the Certificates are ever owned by more than one Person, the Trust Agreement provides that the Issuer will then be treated as a partnership or a grantor trust for federal income tax purposes.(5) In addition, HABS and HMFC have represented that the Issuer will not affirmatively elect to be classified as an association for federal income tax purposes.(6) Finally, if there are multiple owners of the Certificates, then certain transfer restrictions will be imposed that are designed to prevent public trading of the Certificates (the "Transfer Restrictions").(7) Furthermore, the Owner Trustee may not take any action that would result in the Issuer becoming taxable as a corporation for federal income tax purposes.(8) Receivables and Eligible Investments. The motor vehicle retail installment sale contracts that comprise the Receivables are secured by new or used automobiles and light-duty trucks and - ---------- (2) See section 2.03 of the Trust Agreement. (3) HABS will initially own all of the Certificates. (4) See section 2.06 of the Trust Agreement, p. A-3 of the Form of Trust Certificate. (5) See id. (6) See Officer's Certificates. (7) See section 3.11 of the Trust Agreement (Certificates will not be transferred or marketed on an "established securities market," prior consent of Issuer required with respect to certain transfers that raise public trading concerns, etc.). (8) See section 6.06 of the Trust Agreement. November 7, 2003 Page 4 LATHAM & WATKINS LLP were originated by franchised motor vehicle dealers rather than the Issuer.(9) The Receivables require monthly level payments at specified times.(10) In addition to the Receivables, the Indenture Trustee may invest funds on deposit in the Collection Account and the Reserve Account in Eligible Investments (as defined in the Sale and Servicing Agreement).(11) Eligible Investments generally are securities or instruments issued or guaranteed by highly rated obligors or guarantors.(12) Payments of Interest. Interest on the principal balances of the classes of the Notes will accrue at the following fixed rates: Class A-1: 1.11%, Class A-2: 1.56%, Class A-3: 2.33%, Class A-4: 3.02%, Class B: 2.99%, Class C: 3.19% and Class D: 4.06%.(13) Interest will be payable monthly on the 15th day of each month (or the next succeeding business day), commencing December 15, 2003.(14) Interest payments to holders of the Class B Notes will be subordinated to interest payments to the more senior classes and servicing fees due to the Servicer and, in limited circumstances, principal payments with respect to the more senior classes. Interest payments to holders of Class C Notes will be subordinated to interest payments to the more senior classes and servicing fees due to the Servicer and, in limited circumstances, principal payments with respect to the more senior classes. Interest payments to holders of Class D Notes will be subordinated to interest payments to the more senior classes and servicing fees due to the Servicer, and in limited circumstances, principal payments with respect to the more senior classes.(15) The Certificates do not bear interest. A failure to pay an amount of interest on the "controlling class" of Notes (i.e., the most senior class of Notes then outstanding) within thirty-five days of the due date is an Event of Default under the Indenture.(16) It was represented to us that it is expected that collections on the Receivables will significantly exceed the funds necessary to make timely payments of amounts due on the Notes and that it is a remote likelihood that interest on the Notes will not be paid in full on each monthly payment date.(17) Payments of Principal. The Issuer will pay principal on the Notes monthly on the 15th day of each month (or the next succeeding business day), commencing December 15, 2003, from deposits made to the principal distribution account.(18) Principal payments on the Notes will - ---------- (9) See cover page of the Prospectus Supplement. (10) See page 7 of the Base Prospectus. (11) See section 5.02(b)(v) of the Sale and Servicing Agreement. (12) See definition of Eligible Investments in Sale and Servicing Agreement. (13) See Exhibits A-1, A-2, A-3, A-4, B, C and D of Indenture. (14) See definition of Payment Date in Indenture. (15) See sections 5.04 and 8.02 of Indenture. (16) See section 5.01(i) of Indenture. (17) See Officer's Certificates. (18) See sections 2.08(b), 3.01 and 8.02(d) of Indenture. November 7, 2003 Page 5 LATHAM & WATKINS LLP generally be made in the following order of priority: (i) to the Class A-1 Notes until they are paid in full; (ii) to the Class A-2 Notes until they are paid in full; (iii) to the Class A-3 Notes until they are paid in full; (iv) to the Class A-4 Notes until they are paid in full; (v) to the Class B Notes until they are paid in full; (vi) to the Class C Notes until they are paid in full; and (vii) to the Class D Notes until they are paid in full.(19) In addition, following certain Events of Default under the Indenture, the Issuer will make no distributions of principal and interest on the Class B Notes until payment in full of principal and interest on the Class A Notes; the Issuer will make no distributions of principal and interest on the Class C Notes until payment in full of principal and interest on the Class B Notes; the Issuer will make no distributions of principal and interest on the Class D Notes until payment in full of principal and interest on the Class C Notes; and the Issuer will make no distributions on account of the Certificates until payment in full of principal and interest on the Class D Notes.(20) Payment of principal on the Class A Notes will be made first to the Class A-1 Notes until payment in full and then pro rata to the Class A-2, Class A-3 and Class A-4 Notes.(21) The Certificates do not have a principal amount. The Stated Maturity Dates for the Notes are: November 15, 2004 for the Class A-1 Notes, September 15, 2006 for the Class A-2 Notes, November 15, 2007 for the Class A-3 Notes, October 15, 2010 for the Class A-4 Notes, October 15, 2010 for the Class B Notes, October 15, 2010 for the Class C Notes and October 15, 2010 for the Class D Notes.(22) A failure to pay principal on a class of Notes on the Stated Maturity Date for such class is an Event of Default under the Indenture.(23) It was represented to us that the Issuer expects that collections on the Receivables will significantly exceed the funds necessary to make timely payments of amounts due on the Notes.(24) Credit Enhancement. To protect against any defaults or shortages in payments to be received by the Issuer with respect to the Receivables, credit enhancement for the Notes will be provided in the form of: (i) subordination and overcollateralization features with respect to the different classes of Notes; (ii) the Reserve Account; and (iii) subordination of the Certificateholders' right to receive amounts collected on the Receivables in excess of amounts required to compensate the Servicer, reimburse Advances, and pay the principal amount of, and interest on, the Notes. Subordination and Overcollateralization. As stated above, interest and principal payments with respect to the junior classes of Notes are generally subordinated to payments with respect to the more senior classes of Notes. In addition, payments with respect to the Certificates are generally subordinated to payments with respect to the Notes. The principal balance of the Receivables on the Cut-off Date of $815,463,348.54 exceeds the initial principal balance of the - ---------- (19) See section 8.02(d) of Indenture. (20) See section 5.04 of Indenture. (21) See id. (22) See Exhibits A-1, A-2, A-3, A-4, B, C and D of Indenture. (23) See section 5.01 of Indenture. (24) See Officer's Certificates. November 7, 2003 Page 6 LATHAM & WATKINS LLP Notes ($753,347,000) by $62,116,348.54. This overcollateralization amount includes an initial Yield Supplement Overcollateralization Amount of $34,793,005.31 (the "YSOA").(25) After the Closing Date, the Issuer will maintain overcollateralization by paying down principal on the Notes to the extent the outstanding principal amount of the Notes is greater than the excess, if any, of the Adjusted Pool Balance (defined below) over the Target Overcollateralization Amount.(26) The Target Overcollateralization Amount with respect to any Payment Date is equal to the greater of (i) 9% of the Adjusted Pool Balance, minus amounts on deposit in the Reserve Account (after withdrawals from the Reserve Account but prior to deposits to the Reserve Account) and (ii) 1.25% of the Adjusted Pool Balance as of the Cut-off Date; provided that the Target Overcollateralization Amount is not greater than the Adjusted Pool Balance on such Payment Date. Reserve Account. On the Closing Date, the Issuer will establish the Reserve Account and will make a deposit thereto in an amount equal to $5,855,027.57, (27) which is equal to .75% of (i) the aggregate principal balance of the receivables as of the Cut-off Date less (ii) the initial YSOA as of the Closing Date (the "Adjusted Pool Balance").(28) However, the Reserve Account amount will be no more than the principal balance of outstanding Notes (after giving effect to the allocation of principal payments on such payment date).(29) Subordination of the Certificateholders' Right to Receive Excess Amounts. The weighted average interest rate on the Receivables as of the Cut-off Date (taking into account the amount of each Receivable) is approximately 7.296%, which exceeds the sum of the weighted average coupon on the Notes (approximately 2.061%, computed without regard to term) and the 1% servicing fee by approximately 4.2%, and will also substantially exceed the 4.06% coupon on the Class D Notes. The right of the Certificateholders to any such excess is subordinated to the rights of the Noteholders to receive payments of principal and interest and any other amounts payable to the Noteholders. Form. The Notes are denominated as debt, the Issuer intends that the Notes be characterized as debt for federal income tax purposes, and the Noteholders, by their acceptance of the Notes, will agree to treat the Notes as indebtedness for federal income tax purposes.(30) Moreover, it was represented to us at the time of the issuance of the Notes that the parties - ---------- (25) Although the YSOA provides additional overcollateralization benefit, the YSOA is intended to compensate for the low annual percentage rates on some of the Receivables. The YSOA declines on each payment date in accordance with a predetermined schedule as the principal amount of the Receivables decline. (26) See section 5.05(b) of the Sale and Servicing Agreement and section 8.02(d) of the Indenture. (27) See sections 5.02(b) and 5.06 of the Sale and Servicing Agreement. (28) See section 5.06 of the Sale and Servicing Agreement. (29) See id. (30) See section 2.13 and Exhibits A-1, A-2, A-3, A-4, B, C and D of Indenture. November 7, 2003 Page 7 LATHAM & WATKINS LLP intended to create unconditional debt obligations of the Issuer and a debtor-creditor relationship between the Issuer and the holders of the Notes.(31) Ratings. The Prospectus Supplement indicates that the Notes have received the following ratings by Standard & Poor's Ratings Services, Moody's Investors Service, Inc. and Fitch, Inc., respectively: A-1+, P-1 and F1+ for Class A-1; AAA, Aaa and AAA for Class A-2; AAA, Aaa and AAA for Class A-3; AAA, Aaa and AAA for Class A-4; AA, Aa2 and AA for Class B; A, A1 and A+ for Class C; and BBB, Baa2 and BBB+ for Class D. III. DISCUSSION. A. The Notes Will Be Treated as Indebtedness for Federal Income Tax Purposes. Whether an instrument represents debt or equity for U.S. federal income tax purposes depends on the facts and circumstances of the particular situation and no one factor is determinative.(32) Among the factors to be considered are: (i) whether the instrument is payable within a reasonable period of time and on a fixed maturity date; (ii) whether the payment of principal and interest is dependent upon the earnings or the discretion of the issuer; (iii) whether the claim of the holder of the instrument will have priority over the claims of holders of all classes of equity of the issuer; (iv) whether the instrument gives the holder voting or management powers; (v) whether a default in the payment of principal or interest accelerates the maturity of the instrument and creates the right in the holder to enforce payment thereof; (vi) whether the issuer has an adequate capital structure; (vii) whether it is reasonable for the holder of the instrument to anticipate the payment of principal and interest; and (viii) whether at the time of issuance the parties intend to create a debtor-creditor relationship.(33) The analysis of these factors serves to determine whether the economic reality of the holder's investment in the instrument is consistent with risk capital subject solely to the performance of the corporation's business, or is a bona fide loan, repayment of which is reasonably expected, and may be compelled to be made in full. Whether the Notes are in substance debt of the Issuer also depends on which party to the transactions holds the "substantial incidents of ownership" of the collateral. The courts have identified a variety of factors that must be considered in making that determination.(34) The decided cases have also focused on the distinction between a true sale of a right to future income and an assignment of anticipated income as collateral to a lender (with the assignor remaining - ---------- (31) See Officer's Certificates. (32) See John Kelley Co. v. Commissioner, 326 U.S. 521 (1943); Rev. Rul. 68-54, 1968-1 C.B. 69. (33) See Rev. Rul. 68-54, 1968-1 C.B. at 70. (34) See Town & Country Food Co. v. Commissioner, 51 T.C. 1049 (1969), acq., 1969-2 C.B. xxv; United Surgical Steel Co. v. Commissioner, 54 T.C. 1215 (1970), acq., 1971-2 C.B. 3; G.C.M. 39584 (December 3, 1986). November 7, 2003 Page 8 LATHAM & WATKINS LLP liable to the lender on the underlying obligation).(35) Here, the important considerations are: which party bears the burdens of ownership of property that is formally owned by the issuer of the instrument (i.e., the risk of loss from the Receivables), which party holds the benefits of ownership of the property (i.e., the potential for income or gain from the Receivables) and the Issuer's retention of liability to the holders of the Notes. An analysis of these factors demonstrates that the Notes will be treated as debt for federal income tax purposes. 1. Indicia of Indebtedness. All of the Notes have final maturity dates of less than seven years from the issue date, fixed principal amounts, and stated non-contingent interest that is payable monthly at rates ranging from 1.11% to no greater than 4.06%. The Issuer has no discretion regarding the payment of these principal and interest amounts. As indicated above, Noteholder claims will have priority over claims of the Certificateholders as the Certificates are subordinated to the Notes. The Notes do not confer on the Noteholders any management powers or voting rights with respect to the election of officers or board members of the Issuer or HABS or their affiliates or the business operations of these entities. It was represented to us that it is expected that collections on the Receivables will significantly exceed the funds necessary to make timely payments of amounts due on the Notes. Moreover, the most subordinated Notes, the Class D Notes, will be rated at least BBB, Baa2 and BBB+ by the rating agencies. Thus, it is reasonable to anticipate the payment of principal and interest on all of the Notes in a timely manner. The Notes are denominated as debt and it was represented to us that it is intended that the Notes create unconditional obligations of the Issuer and that the issuance of the Notes will create a debtor-creditor relationship. The Noteholders, by their acceptance of the Notes, will agree to treat the Notes as indebtedness for federal income tax purposes. In addition, to the knowledge of HABS and HMFC, none of the initial beneficial owners of the Notes will be related to the Issuer, directly or indirectly, other than being related as a creditor as a result of the acquisition of the Notes. A failure to pay an amount of interest on the "controlling class" of Notes within thirty-five days of the payment due date or a failure to pay principal on a class of Notes on their Stated Maturity Date is an Event of Default under the Indenture. Upon the occurrence of an Event of Default, the Indenture Trustee or holders of a majority in principal amount of the most senior class of Notes may declare the Notes to be immediately due and payable. Although it is possible that interest payments on subordinated classes of Notes may not be paid in full each month, it was represented to us that the likelihood of this happening is remote. In addition, any such interest not timely paid will be due and payable no later than the Stated Maturity Date on the particular Notes. Where unpaid or deferred interest is due and payable no later than a certain - ---------- (35) See Watts Copy Systems, Inc. v. Commissioner, T.C. Memo. 1994-124 (1994); see also, Priv. Ltr. Rul. 8643002 (June 20, 1986). November 7, 2003 Page 9 LATHAM & WATKINS LLP fixed date in the future, courts have generally upheld debt characterization for federal income tax purposes.(36) The Issuer's capital structure further supports treating the Notes as debt for federal income tax purposes. The HABS Officer's Certificate provides that, based on certain assumptions as provided therein, the present value of the cash flows that are expected to be available to the Certificates, on the date the Notes are issued, is approximately $69 million. The Certificates constitute equity of the Trust and the present value of such cash flows represents approximately 8.4% of the Trust's initial capitalization. The Certificates represent a residual interest in the Reserve Account, which provides credit support for the Notes and will, on the Closing Date, equal .75% of the Adjusted Pool Balance (as of the Cut-off Date), and collections on the Receivables in excess of the payments on the Notes and other expenses of the Issuer. The adequacy of such equity and credit support is reflected in the very high credit ratings received on the Notes, including BBB, Baa2 and BBB+ on the most subordinated Notes, the Class D Notes. Finally, courts have recognized that finance companies are likely to have higher debt-to-equity ratios than other businesses.(37) The foregoing analysis supports the conclusion that the Notes will be treated as indebtedness for United States federal income tax purposes. 2. The Burdens and Benefits of Ownership of the Receivables are not Borne by the Noteholders. Payments of principal and interest on the Notes are dependent upon available cash collected from the Receivables. However, the Noteholders will be protected from losses on the Receivables as a result of the credit enhancement features, including subordination features, overcollateralization amounts and the Reserve Account, which all protect the Noteholders' rights to receive payments. As indicated above, the obligations of the Issuer with respect to the Notes are substantially overcollateralized and the Notes are highly rated by the rating agencies. "Overcollateralization" has been recognized as being characteristic of a loan.(38) Consequently, holders of the Notes have substantial protection against losses. Likewise, the benefits of ownership of the Receivables inure solely to the Issuer and not to the Noteholders. The Noteholders are only entitled to receive their fixed principal and interest payments on the Notes, whereas the Certificateholders are entitled to receive all collections on the Receivables in excess of the amounts necessary to pay interest and principal due to the - ---------- (36) See, e.g., Tomlinson v. The 1661 Corp., 377 F.2d 291, 294 (5th Cir. 1967) (debentures that paid cumulative interest held to be debt even though the corporation rarely, if ever, paid interest currently). (37) See, e.g., P.M. Finance Corp. v. Comm'r, 302 F.2d 786, 788 (3rd Cir. 1962); Jaeger Auto Finance Co. v. Nelson, 191 F. Supp. 693, 698 (E.D. Wis. 1961). (38) See, e.g., United Surgical Steel Co., 54 T.C. at 1227-31; Yancey Brothers Co. v. United States, 319 F. Supp. 441, 446 (N.D. Ga. 1970). November 7, 2003 Page 10 LATHAM & WATKINS LLP Noteholders. Thus, if payments on the Receivables exceed the amounts currently projected, such excess should inure solely to the benefit of the Certificateholders. The foregoing discussion demonstrates that the Notes exhibit characteristics consistent with bona fide debt that is expected or may be compelled to be repaid in full and that the Certificates and the Reserve Account are reasonably expected to absorb the economic risk associated with the performance of the underlying Receivables that secure the Notes. Accordingly, it is our opinion that, although there is no direct governing authority, for United States federal income tax purposes the Notes will be treated as indebtedness. B. The Trust Will Not Be Treated as an Association or Publicly Traded Partnership, Taxable as a Corporation for Federal Income Tax Purposes. An entity that is not organized as a corporation nevertheless will be treated as an "association" for federal income tax purposes if it is an entity that must be treated as a corporation under one of the eight categories in Treasury Regulation Section 301.7701-2(b). Two such categories are relevant here,(39) the first of which is an entity that files an appropriate election (or such an election has been filed on its behalf) to be treated as an association.(40) As indicated above, the Trust Agreement and the form of Trust Certificate provide that, for federal income tax purposes, as long as a single Person owns the Certificates, it is intended and agreed that the Issuer will be treated as a grantor trust or disregarded as an entity separate from its owner, and if two or more Persons own the Certificates, the Issuer will be treated as a partnership or a grantor trust. In addition, the Officer's Certificates provide that the Issuer will not file an election to be treated as a corporation for federal income tax purposes.(41) Thus, the Issuer will not be treated as an "association" for United States federal income tax purposes. The second relevant category of entities treated as corporations are "publicly traded partnerships." An entity will be treated as a publicly traded partnership taxable as a corporation for federal income tax purposes if: (i) it is a partnership for federal income tax purposes, (ii) its ownership interests are (A) traded on an established securities market or (B) are readily tradable on a secondary market or the substantial equivalent thereof (in either such circumstance, "publicly traded") and (iii) less than 90% of its gross income from a taxable year consists of passive-type income, including interest that is not derived in the conduct of a financial - ---------- (39) A statutory trust is not an entity that must be treated as a corporation under Treas. Reg. Secs. 301.7701-2(b)(1), (3), (4), (5), (6) or (8). An entity must be treated as a corporation under Treas. Reg. Sec. 301.7701-2(b)(7) if it is a "publicly traded partnership" or a "taxable mortgage pool". An entity will not be a taxable mortgage pool if 50% or less of its assets consist of real estate mortgages. The determination of whether an entity is a publicly traded partnership is discussed below. (40) See Treas. Reg. Secs. 301.7701-2(b)(2), 301.7701-3. (41) The Owner Trustee has also agreed that it will not take any action that, to its actual knowledge, would result in the Trust becoming taxable as a corporation for federal income tax purposes. November 7, 2003 Page 11 LATHAM & WATKINS LLP business.(42) If two or more Persons ever own the Certificates, the Issuer will be treated as a partnership or a grantor trust by the parties, but the Transfer Restrictions ensure that the Certificates will not be "publicly traded." Accordingly, the Issuer will not be treated for United States federal income tax purposes as a publicly traded partnership taxable as a corporation. IV. OPINIONS. Based upon and subject to the foregoing, we are of the opinion that, as of the date hereof, although there is no direct governing authority, for United States federal income tax purposes (i) the Notes will be treated as indebtedness and (ii) the Issuer will not be treated as an association or a publicly traded partnership, taxable as a corporation. In addition, it is our opinion that, as of the date hereof, based on the facts and assumptions and subject to the limitations set forth in the Prospectus, the statements under the heading "Material United States Federal Income Tax Consequences," in the Prospectus, insofar as they purport to summarize certain provisions of the statutes or regulations referred to therein, are accurate summaries in all material respects. Except as set forth above, we express no other opinion as to any federal, state, local or foreign tax or other consequences of the transactions described herein. These opinions are rendered only to you, and are for your use in connection with the issuance of the Notes upon the understanding that we are not hereby assuming professional responsibility to any other person whatsoever. These opinions are not intended for the express or implied benefit of any third party and are not to be used or relied upon by any other person or for any other purpose without our prior written approval in each instance. Very truly yours, /s/ Latham & Watkins LLP - ---------- (42) See Code Sec. 7704; Treas. Reg. Sec. 301.7701-2(b)(7). It appears that the income of the Issuer will consist solely of interest income derived from passive ownership of the Receivables and any cash or cash-equivalents held by the Issuer and thus such income should not be considered derived by a financial business. We have not attempted to determine whether each of the Receivables and Eligible Investments purchased by the Issuer should be characterized as debt for United States federal income tax purposes. We understand, however, that each Receivable that will be purchased by the Issuer provides for fixed payments consisting of principal and interest at a fixed rate and provides for normal creditors' remedies for nonpayment of principal and interest. We further understand that Eligible Investments are obligations that are issued or guaranteed by highly rated issuers or guarantors. SCHEDULE I Hyundai ABS Funding Corporation 10550 Talbert Avenue Fountain Valley, California 92708 Hyundai Motor Finance Company 10550 Talbert Avenue Fountain Valley, California 92708 Hyundai Auto Receivables Trust 2003-A Rodney Square North 1100 North Market Street Wilmington, Delaware 19890-0001 Wilmington Trust Company Rodney Square North 1100 North Market Street Wilmington, Delaware 19890-0001 Wells Fargo Bank Minnesota, National Association Sixth and Marquette Avenue MAC N9311-161 Minneapolis, Minnesota 55479 Standard & Poor's 55 Water Street New York, New York 10041 Fitch, Inc. 1 State Street Plaza, 32nd Floor New York, New York 10004 Moody's Investors Service, Inc. 99 Church Street New York, New York 10017 Banc One Capital Markets, Inc., Individually and as Representative of the Several Underwriters One Bank One Plaza, Mail Suite IL1-0596 Chicago, Illinois 60670 EX-10 7 ex10-1.txt EXHIBIT 10.1 Exhibit 10.1 EXECUTION COPY ================================================================================ SALE AND SERVICING AGREEMENT among HYUNDAI AUTO RECEIVABLES TRUST 2003-A, Issuer, HYUNDAI ABS FUNDING CORPORATION, Depositor, HYUNDAI MOTOR FINANCE COMPANY, Seller and Servicer, and WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, Indenture Trustee Dated as of November 7, 2003 ================================================================================ TABLE OF CONTENTS ARTICLE I. DEFINITIONS Section 1.01 Definitions...................................................1 Section 1.02 Other Definitional Provisions................................16 ARTICLE II. CONVEYANCE OF RECEIVABLES Section 2.01 Conveyance of Receivables....................................17 ARTICLE III. THE RECEIVABLES Section 3.01 Representations and Warranties of the Seller.................18 Section 3.02 Representations and Warranties of the Depositor..............19 Section 3.03 Repurchase Upon Breach.......................................19 ARTICLE IV. ADMINISTRATION AND SERVICING OF RECEIVABLES Section 4.01 Duties of Servicer...........................................20 Section 4.02 Collection of Receivable Payments; Modifications of Receivables...............................................21 Section 4.03 Realization upon Receivables.................................21 Section 4.04 Physical Damage Insurance....................................22 Section 4.05 Maintenance of Security Interests in Financed Vehicles.......22 Section 4.06 Covenants of Servicer........................................22 Section 4.07 Purchase of Receivables Upon Breach..........................23 Section 4.08 Servicing Fee................................................23 Section 4.09 Servicer's Certificate.......................................23 Section 4.10 Annual Statement as to Compliance, Notice of Servicer Termination Event.........................................24 Section 4.11 [Reserved]...................................................24 Section 4.12 Access to Certain Documentation and Information Regarding Receivables................................................24 Section 4.13 Term of Servicer.............................................24 Section 4.14 Annual Independent Accountants' Report.......................24 Section 4.15 Reports to the Commission....................................25 Section 4.16 Compensation of Indenture Trustee............................25 ARTICLE V. DISTRIBUTIONS; STATEMENTS TO SECURITYHOLDERS Section 5.01 Post Office Box..............................................25 Section 5.02 Accounts.....................................................26 Section 5.03 Application of Collections...................................28 Section 5.04 Purchase Amounts.............................................28
i Section 5.05 Distributions................................................28 Section 5.06 Reserve Account..............................................30 Section 5.07 Statements to Securityholders................................31 Section 5.08 Advances by the Servicer.....................................32 ARTICLE VI. THE DEPOSITOR Section 6.01 Representations of Depositor.................................32 Section 6.02 Corporate Existence..........................................34 Section 6.03 Liability of Depositor; Indemnities..........................34 Section 6.04 Merger or Consolidation of, or Assumption of the Obligations of, Depositor.................................34 Section 6.05 Amendment of Depositor's Organizational Documents............34 ARTICLE VII. THE SERVICER Section 7.01 Representations of Servicer..................................34 Section 7.02 Indemnities of Servicer......................................36 Section 7.03 Merger or Consolidation of, or Assumption of the Obligations of, Servicer..................................37 Section 7.04 Limitation on Liability of Servicer and Others...............37 Section 7.05 Appointment of Subservicer...................................38 Section 7.06 Servicer Not to Resign.......................................38 ARTICLE VIII. DEFAULT Section 8.01 Servicer Termination Events..................................38 Section 8.02 Consequences of a Servicer Termination Event.................39 Section 8.03 Appointment of Successor Servicer............................39 Section 8.04 Notification to Securityholders..............................40 Section 8.05 Waiver of Past Defaults......................................40 ARTICLE IX. TERMINATION Section 9.01 Optional Purchase of All Receivables.........................40 ARTICLE X. MISCELLANEOUS Section 10.01 Amendment....................................................41 Section 10.02 Protection of Title to Trust.................................42 Section 10.03 Notices......................................................43 Section 10.04 Assignment by the Depositor or the Servicer..................44 Section 10.05 Limitations on Rights of Others..............................44 Section 10.06 Severability.................................................44
Section 10.07 Counterparts.................................................44 Section 10.08 Headings.....................................................44 Section 10.09 GOVERNING LAW................................................44 Section 10.10 Assignment by Issuer.........................................44 Section 10.11 Nonpetition Covenants........................................44 Section 10.12 Limitation of Liability of Owner Trustee and Indenture Trustee...................................................45 Exhibit A Representations and Warranties of Hyundai Motor Finance Company Under Section 3.02 of the Receivables Purchase Agreement Exhibit B Form of Record Date Statement Exhibit C Form of Servicer's Certificate Exhibit D Extension Policy Schedule A Schedule of Receivables Schedule B Required Yield Supplement Overcollateralization Amount
This SALE AND SERVICING AGREEMENT, dated as of November 7, 2003, among HYUNDAI AUTO RECEIVABLES TRUST 2003-A, a Delaware statutory trust (the "Issuer"), HYUNDAI ABS FUNDING CORPORATION, a Delaware corporation (the "Depositor"), HYUNDAI MOTOR FINANCE COMPANY, a California corporation, as servicer (in such capacity, the "Servicer") and as seller (in such capacity, the "Seller"), and WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking association, as indenture trustee (the "Indenture Trustee"). WHEREAS, the Issuer desires to purchase a portfolio of receivables arising in connection with automobile retail installment sale contracts acquired by Hyundai Motor Finance Company in the ordinary course of business and sold by Hyundai Motor Finance Company to the Depositor; WHEREAS, the Depositor is willing to sell such receivables to the Issuer; and WHEREAS, Hyundai Motor Finance Company is willing to service such receivables. NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereto agree as follows: ARTICLE I. DEFINITIONS Section 1.01 Definitions. Whenever used in this Agreement, the following words and phrases, unless the context otherwise requires, shall have the following meanings: "Administration Agreement" means the Owner Trust Administration Agreement, dated as of November 7, 2003, among Hyundai Auto Receivables Trust 2003-A, Hyundai Motor Finance Company, and Wells Fargo Bank Minnesota, National Association, as amended, supplemented, amended and restated or otherwise modified from time to time. "Adjusted Pool Balance" means, with respect to any Payment Date, the Pool Balance as of the end of the previous Collection Period less the Required Yield Supplement Overcollateralization Amount with respect to such Payment Date. "Advance" means, as to any Payment Date, an advance made by the Servicer on such Payment Date pursuant to Section 5.08 in respect of the aggregate of all Scheduled Payments of interest which were due during the related Collection Period that remained unpaid at the end of such Collection Period. "Agreement" means this Sale and Servicing Agreement, as amended, supplemented, amended and restated or otherwise modified from time to time. "Amount Financed" means with respect to a Receivable, the amount advanced under the Receivable toward the purchase price of the Financed Vehicle and any related costs. 1 "Annual Percentage Rate" or "APR" of a Receivable means the annual rate of finance charges stated in the related Contract. "Available Amounts" means, with respect to any Payment Date, the sum of the following amounts (without duplication) with respect to the related Collection Period: (i) all Collections on Receivables, (ii) the Purchased Amount of each Receivable that becomes a Purchased Receivable, (iii) Advances and (iv) Recoveries. "Available Amounts Shortfall" means, with respect to any Payment Date, the positive difference, if any, of the Total Required Payment for such Payment Date minus the Available Amounts for such Payment Date. "Basic Documents" means the Trust Agreement, the Securities Account Control Agreement, the Indenture, this Agreement, the Receivables Purchase Agreement, the Administration Agreement, the Note Depository Agreement and other documents and certificates delivered in connection therewith. "Business Day" means any day other than a Saturday, a Sunday or a day on which a commercial banking institution in the states of California, Delaware, Minnesota or New York are authorized or obligated by law or executive order to remain closed. "Certificate" means a certificate evidencing the beneficial interest of a Certificateholder in the Trust. "Certificateholders" has the meaning assigned to such term in the Trust Agreement. "Class" means any one of the classes of Notes. "Class A Noteholders" means the Class A-1 Noteholders, the Class A-2 Noteholders, Class A-3 Noteholders and the Class A-4 Noteholders. "Class A Notes" means the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes. "Class A-1 Noteholder" means the Person in whose name a Class A-1 Note is registered in the Note Register. "Class A-1 Notes" means the 1.11% Asset Backed Notes, Class A-1, substantially in the form of Exhibit A-1 to the Indenture. "Class A-1 Rate" means 1.11% per annum, computed on the basis of an actual/360-day year. "Class A-2 Noteholder" means the Person in whose name a Class A-2 Note is registered in the Note Register. "Class A-2 Notes" means the 1.56% Asset Backed Notes, Class A-2, substantially in the form of Exhibit A-2 to the Indenture. 2 "Class A-2 Rate" means 1.56% per annum, computed on the basis of a 360-day year consisting of twelve 30-day months. "Class A-3 Noteholder" means the Person in whose name a Class A-3 Note is registered in the Note Register. "Class A-3 Notes" means the 2.33% Asset Backed Notes, Class A-3, substantially in the form of Exhibit A-3 to the Indenture. "Class A-3 Rate" means 2.33% per annum, computed on the basis of a 360-day year consisting of twelve 30-day months. "Class A-4 Noteholder" means the Person in whose name a Class A-4 Note is registered in the Note Register. "Class A-4 Notes" means the 3.02% Asset Backed Notes, Class A-4, substantially in the form of Exhibit A-4 to the Indenture. "Class A-4 Rate" means 3.02% per annum, computed on the basis of a 360-day year consisting of twelve 30-day months. "Class B Maturity Date" means October 15, 2010. "Class B Noteholder" means the Person in whose name a Class B Note is registered in the Note Register. "Class B Notes" means the 2.99% Asset Backed Notes, Class B, substantially in the form of Exhibit B to the Indenture. "Class B Rate" means 2.99% per annum, computed on the basis of a 360-day year consisting of twelve 30-day months. "Class C Maturity Date" means October 15, 2010. "Class C Noteholder" means the Person in whose name a Class C Note is registered in the Note Register. "Class C Notes" means the 3.19% Asset Backed Notes, Class C, substantially in the form of Exhibit C to the Indenture. "Class C Rate" means 3.19% per annum, computed on the basis of a 360-day year consisting of twelve 30-day months. "Class D Maturity Date" means October 15, 2010. "Class D Noteholder" means the Person in whose name a Class D Note is registered in the Note Register. 3 "Class D Notes" means the 4.06% Asset Backed Notes, Class D, substantially in the form of Exhibit D to the Indenture. "Class D Rate" means 4.06% per annum, computed on the basis of a 360-day year consisting of twelve 30-day months. "Closing Date" means November 7, 2003. "Collateral" has the meaning specified in the Granting Clause of the Indenture. "Collection" means, with respect to any Receivable and to the extent received by the Servicer after the Cutoff Date, (i) any monthly payment by or on behalf of the Obligor thereunder, (ii) full or partial prepayment of that Receivable, (iii) all Liquidation Proceeds and (iv) any other amounts received by the Servicer which, in accordance with the customary servicing practices, would be applied to the payment of accrued interest or to reduce the Principal Balance of that Receivable; provided, however, that the term "Collection" in no event will include (1) any amounts in respect of any Receivable purchased by the Servicer, the Seller or the Depositor on a prior Payment Date, (2) any late fees, extension fees, non-sufficient funds charges and any and all other administrative fees or similar charges allowed by applicable law with respect to any Receivable and payable to the Servicer. "Collection Account" means the account designated as such, established and maintained pursuant to Section 5.02(b)(i). "Collection Period" means, with respect to any Payment Date other than the first Payment Date, the calendar month preceding such Payment Date. The Collection Period with respect to the first Payment Date will be the period after the Cutoff Date to and including November 30, 2003. Any amount stated as of the last day of a Collection Period or as of the first day of a Collection Period shall give effect to the following calculations as determined as of the close of business on such last day: (i) all applications of Collections and (ii) all distributions to be made on the following Payment Date. "Commission" means the Securities and Exchange Commission. "Contract" means a motor vehicle retail installment sale contract. "Controlling Class" means with respect to any Notes that are Outstanding, the Class A Notes (voting together as a single class) so long as the Class A Notes are Outstanding, and thereafter the Class B Notes so long as any Class B Notes are Outstanding, and thereafter the Class C Notes so long as any Class C Notes are Outstanding and thereafter the Class D Notes so long as any Class D Notes are Outstanding, excluding in each case, Notes held by the Depositor, the Servicer or their affiliates. "Conveyed Assets" has the meaning provided in Section 2.01. "Corporate Trust Administration Department" has the meaning set forth in the Trust Agreement. 4 "Corporate Trust Office" has the meaning set forth in the Indenture. "Credit and Collection Policy" means the credit and collection policy of HMFC as in effect as of the Closing Date and any subsequent amendments thereto unless the context indicates otherwise. "Cutoff Date" means the close of business on September 30, 2003. "Dealer" means the dealer who sold a Financed Vehicle and who originated the related Receivable and assigned it to HMFC pursuant to a Dealer Agreement. "Dealer Agreement" means an agreement between HMFC and a Dealer pursuant to which such Dealer sells Contracts to HMFC. "Defaulted Receivables" means any Receivable (a) on which any installment is unpaid more than sixty (60) days past its original due date (as defined in the Credit and Collection Policy) or (b) the Obligor of which has suffered an Insolvency Event. "Delivery" when used with respect to Trust Account Property means: (a) with respect to bankers' acceptances, commercial paper, negotiable certificates of deposit and other obligations that constitute "instruments" within the meaning of Section 102(a)(47) of the UCC and are susceptible of physical delivery, transfer thereof to the Indenture Trustee by physical delivery to the Indenture Trustee endorsed to, or registered in the name of, the Indenture Trustee or endorsed in blank, and, with respect to a certificated security (as defined in Section 8-102 of the UCC) transfer thereof (i) by delivery of such certificated security endorsed to, or registered in the name of, the Indenture Trustee or (ii) by delivery thereof to a "clearing corporation" (as defined in Section 8-102 of the UCC) and the making by such clearing corporation of appropriate entries on its books reducing the appropriate securities account of the transferor and increasing the appropriate securities account of the Indenture Trustee by the amount of such certificated security and the identification by the clearing corporation of the certificated securities for the sole and exclusive account of the Indenture Trustee (all of the foregoing, "Physical Property"), and, in any event, any such Physical Property in registered form shall be in the name of the Indenture Trustee; and such additional or alternative procedures as may hereafter become appropriate to effect the complete transfer of ownership of any such Trust Account Property to the Indenture Trustee or its nominee or custodian, consistent with changes in applicable law or regulations or the interpretation thereof; (b) with respect to any security issued by the U.S. Treasury, the Federal Home Loan Mortgage Corporation or by the Federal National Mortgage Association that is a book-entry security held through the Federal Reserve System pursuant to federal book-entry regulations, the following procedures, all in accordance with applicable law, including applicable federal regulations and Articles 8 and 9 of the UCC: book-entry registration of such Trust Account Property to an appropriate book-entry account maintained with a Federal Reserve Bank by a securities intermediary that is also a "depository" pursuant to applicable federal regulations; the making by such securities 5 intermediary of entries in its books and records crediting such Trust Account Property to the Indenture Trustee's security account at the securities intermediary and identifying such book-entry security held through the Federal Reserve System pursuant to federal book-entry regulations as belonging to the Indenture Trustee; and such additional or alternative procedures as may hereafter become appropriate to effect complete transfer of ownership of any such Trust Account Property to the Indenture Trustee, consistent with changes in applicable law or regulations or the interpretation thereof; and (c) with respect to any item of Trust Account Property that is an uncertificated security under Article 8 of the UCC and that is not governed by clause (b) above, registration on the books and records of the issuer thereof in the name of the Indenture Trustee or its nominee or custodian who either (i) becomes the registered owner on behalf of the Indenture Trustee or (ii) having previously become the registered owner, acknowledges that it holds for the Indenture Trustee. "Depositor" means Hyundai ABS Funding Corporation, a Delaware corporation, and its successors in interest. "Determination Date" means, with respect to each Payment Date, the earlier of the tenth calendar day of the month in which such Payment Date occurs (or if such tenth day is not a Business Day, the next succeeding Business Day). "Eligible Deposit Account" means a segregated account with an Eligible Institution. "Eligible Institution" means (a) the corporate trust department of the Indenture Trustee or the Owner Trustee or (b) the corporate trust department of a depository institution organized under the laws of the United States, any State, the District of Columbia or the Commonwealth of Puerto Rico, that (i) has either (A) a long-term unsecured debt rating from Moody's of at least "Baa3", Standard & Poor's of at least "BBB-", or Fitch of at least "BBB-" (or a lower rating as any Rating Agency shall approve in writing) or (B) a short-term unsecured debt rating or certificate of deposit rating in the highest investment category granted thereby and (ii) the deposits of which are insured by the FDIC. "Eligible Investments" means book-entry securities, negotiable instruments or securities represented by instruments in bearer or registered form and that evidence: (a) direct obligations of, and obligations fully guaranteed as to the full and timely payment by, the United States of America; (b) demand deposits, time deposits or certificates of deposit of any depository institution (including any affiliate of the Depositor, the Servicer, the Indenture Trustee or the Owner Trustee) or trust company incorporated under the laws of the United States of America or any state thereof or the District of Columbia (or any domestic branch of a foreign bank) and subject to supervision and examination by Federal or state banking or depository institution authorities (including depository receipts issued by any such institution or trust company as custodian with respect to any obligation referred to in the first bullet point above or a portion of such obligation for the benefit of the holders of such depository receipts); provided that at the time of the investment or contractual 6 commitment to invest therein (which shall be deemed to be made again each time funds are reinvested following each Payment Date), the commercial paper or other short-term senior unsecured debt obligations (other than such obligations the rating of which is based on the credit of a person other than such depository institution or trust company) of such depository institution or trust company shall have a credit rating from each Rating Agency in the highest investment category granted thereby; (c) commercial paper (including commercial paper of any affiliate of Depositor, the Servicer, the Indenture Trustee or the Owner Trustee) having, at the time of the investment or contractual commitment to invest therein, a rating from each Rating Agency in the highest investment category granted thereby; (d) investments in money market funds (including funds for which the Depositor, the Servicer, the Indenture Trustee or the Owner Trustee or any of their respective affiliates is investment manager or advisor) having a rating from each of Moody's and Standard & Poor's in the highest investment category granted thereby; (e) bankers' acceptances issued by any depository institution or trust company referred to in clause (b) above; (f) repurchase obligations with respect to any security that is a direct obligation of, or fully guaranteed by, the United States of America or any agency or instrumentality thereof the obligations of which are backed by the full faith and credit of the United States of America, in either case entered into with a depository institution or trust company (acting as principal) described in clause (b); (g) any other investment with respect to which the Issuer, the Indenture Trustee or the Servicer has received written notification from each Rating Agency that the acquisition of such investment will satisfy the Rating Agency Condition. "Eligible Servicer" means Hyundai Motor Finance Company or any other Person that at the time of its appointment as Servicer (i) is servicing a portfolio of motor vehicle retail installment sale contracts or motor vehicle installment loans, (ii) is legally qualified and has the capacity to service the Receivables, (iii) has demonstrated the ability professionally and competently to service a portfolio of motor vehicle retail installment sale contracts or motor vehicle installment loans similar to the Receivables with reasonable skill and care and (iv) has a minimum net worth of $100,000,000. "Extension Policy" shall mean the policies of the Servicer with respect to granting extensions on the Contracts as set forth on Exhibit D hereto. "FDIC" means the Federal Deposit Insurance Corporation, and its successors. "Fee Letter" means the letter regarding fees dated November 7, 2003 between the Depositor, the Owner Trustee and HMFC. 7 "Financed Vehicle" means a new or used automobile, light-duty truck, van or minivan, together with all accessions thereto, securing an Obligor's indebtedness under the related Contract. "First Priority Principal Distribution Amount" means, with respect to any Payment Date, an amount, not less than zero, equal to the result of (i) the aggregate outstanding principal amount of the Class A Notes as of the preceding Payment Date (after giving effect to any principal payments made on the Class A Notes on that preceding Payment Date), minus (ii) the Adjusted Pool Balance at the end of the Collection Period preceding that Payment Date; provided, however, that the First Priority Principal Distribution Amount shall not exceed the sum of the aggregate outstanding principal amount of all of the Notes on that Payment Date (after giving effect to any principal payments made on the Notes on that preceding Payment Date); and provided further, that the First Priority Principal Distribution Amount on and after the Stated Maturity Date of a class of Class A Notes shall not be less than the amount that is necessary to reduce the outstanding principal amount of such class of the Class A Notes and all earlier maturing classes of Class A Notes to zero. "Fitch" means Fitch, Inc., and its successors. "HMFC" means Hyundai Motor Finance Company, a California corporation, and its successors. "Indenture" means the Indenture, dated as of November 7, 2003, between the Issuer and the Indenture Trustee, as amended, supplemented, amended and restated or otherwise modified from time to time. "Indenture Trustee" means the Person acting as Indenture Trustee under the Indenture, its successors in interest and any successor trustee under the Indenture. "Initial Class A-1 Note Balance" means $170,000,000.00. "Initial Class A-2 Note Balance" means $241,000,000.00. "Initial Class A-3 Note Balance" means $130,000,000.00. "Initial Class A-4 Note Balance" means $120,618,000.00. "Initial Class B Note Balance" means $39,034,000.00. "Initial Class C Note Balance" means $11,710,000.00. "Initial Class D Note Balance" means $40,985,000.00. "Initial Pool Balance" means, an amount equal to the aggregate Principal Balance of the Receivables as of the Cutoff Date. "Insolvency Event" means, with respect to a specified Person, (a) the filing of a decree or order for relief by a court having jurisdiction in the premises in respect of such Person or any 8 substantial part of its property in an involuntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its property, or ordering the winding-up or liquidation of such Person's affairs, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or (b) the commencement by such Person of a voluntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by such Person to the entry of an order for relief in an involuntary case under any such law, or the consent by such Person to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its property, or the making by such Person of any general assignment for the benefit of creditors, or the failure by such Person generally to pay its debts as such debts become due, or the taking of action by such Person in furtherance of any of the foregoing. "Interest Distribution Account" means, the account designated as such, established and maintained pursuant to Section 5.02(b)(iv). "Interest Period" means, with respect to the Class A-1 Notes, the period from and including the most recent Payment Date on which interest has been paid (or, in the case of the first Payment Date, the Closing Date) to but excluding the next succeeding Payment Date and, with respect to the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes, the Class B Notes, the Class C Notes and the Class D Notes, the period from and including the fifteenth day of the calendar month (or, in the case of the first Payment Date, from and including the Closing Date) to but excluding the fifteenth day of the next calendar month. "Investment Earnings" means, with respect to any Payment Date, any investment earnings (net of losses and investment expenses) on amounts on deposit in a Trust Account to be deposited into the Collection Account on such Payment Date pursuant to Section 5.02(b). "Issuer" means Hyundai Auto Receivables Trust 2003-A. "Lien" means a security interest, lien, charge, pledge, equity or encumbrance of any kind, other than tax liens, mechanics' liens and any liens that attach to the respective Receivable by operation of law as a result of any act or omission by the related Obligor. "Liquidated Receivable" means a Receivable with respect to which the earlier of the following shall have occurred: (i) the related Financed Vehicle has been repossessed and liquidated, (ii) the related Financed Vehicle has been repossessed for 90 days or more and has not yet been liquidated, (iii) the end of the Collection Period in which the Receivable becomes more than 120 days past due, or (iv) the Servicer has determined in accordance with the Credit and Collections Policy that eventual payment in full of the Amount Financed is unlikely. "Liquidation Proceeds" means, with respect to any Liquidated Receivable, all proceeds of the liquidation of such Liquidated Receivable, net of the sum of any out-of-pocket expenses of the Servicer reasonably allocated to the repossession, transport, reconditioning and liquidation and any amounts required by law to be remitted or allocated to the account of the Obligor on such Liquidated Receivable. 9 "Local Remittance Account" has the meaning provided in Section 5.02(a). "Monthly Remittance Condition" means (i)(A) the short-term debt of the Servicer is rated in the highest rating category, or is otherwise acceptable to, each Rating Agency and (B) no Servicer Termination Event has occurred or (ii)(A) the Servicer obtains a letter of credit, surety bond or insurance policy under which demands for payment may be made to secure the timely remittance of Collections and Available Amounts to the Collection Account and (B) the Indenture Trustee and the Owner Trustee are provided with confirmation from each Rating Agency to the effect that the use of such alternative remittance schedule will not result in the qualification, reduction or withdrawal of its then-current rating on any class of Notes. "Moody's" means Moody's Investors Service, Inc., and its successors. "Note Balance" means, as of any date of determination, an amount equal to (a) the sum of (i) the Initial Class A-1 Note Balance, (ii) the Initial Class A-2 Note Balance, (iii) the Initial Class A-3 Note Balance, (iv) the Initial Class A-4 Note Balance, (v) the Initial Class B Note Balance, (vi) the Initial Class C Note Balance and (vii) the Initial Class D Note Balance less (b) all amounts distributed to Noteholders on or prior to such date and allocable to principal thereon. "Note Distribution Account" means the account designated as such, established and maintained pursuant to Section 5.02(b)(ii). "Note Pool Factor" means, with respect to each Class of Notes as of the close of business on the last day of a Collection Period, a seven-digit decimal figure equal to the Outstanding Amount of such Class of Notes (after giving effect to any reductions thereof to be made on the immediately following Payment Date) divided by the original Outstanding Amount of such Class of Notes. The Note Pool Factor will be 1.0000000 as of the Closing Date; thereafter, the Note Pool Factor will decline to reflect reductions in the Outstanding Amount of such Class of Notes. "Noteholders" shall mean the Class A-1 Noteholders, the Class A-2 Noteholders, the Class A-3 Noteholders, the Class A-4 Noteholders, the Class B Noteholders, the Class C Noteholders or the Class D Noteholders. "Obligor" means a person who obtained installment credit for the purchase of a Financed Vehicle the terms of which are evidenced by a Contract, and any other person obligated to make payments thereunder. "Officers' Certificate" means a certificate signed by (a) the chairman of the board, any vice president, the controller or any assistant controller and (b) the president, a treasurer, assistant treasurer, secretary or assistant secretary of the Depositor or the Servicer, as appropriate. "Opinion of Counsel" means one or more written opinions of counsel, who may be an employee of or counsel to the Depositor or the Servicer, which counsel shall be acceptable to the Indenture Trustee, the Owner Trustee or the Rating Agencies, as applicable, and which shall be addressed to the Owner Trustee and the Indenture Trustee. 10 "Outstanding Amount" means, as of any date of determination, the aggregate principal amount of a Class of Notes outstanding as of such date of determination. "Owner Trustee" means Wilmington Trust Company, acting not in its individual capacity but solely as owner trustee under the Trust Agreement. "Payment Date" means, with respect to each Collection Period, the fifteenth day of the following month or, if such day is not a Business Day, the immediately following Business Day, commencing on December 15, 2003. "Physical Property" has the meaning assigned to such term in the definition of "Delivery" above. "Pool Balance" means, with respect to any Payment Date, an amount equal to the aggregate Principal Balance of the Receivables at the end of the related Collection Period, after giving effect to all payments of principal received from Obligors and Purchase Amounts to be remitted by the Servicer for such Collection Period and reduction to zero of the aggregate outstanding Principal Balance of all Receivables that became Liquidated Receivables during such Collection Period. "Post Office Box" means any post office boxes maintained by Citibank N.A., to which payments on receivables owned or serviced by HMFC are or will be sent. "Principal Balance" means, with respect to any Receivable and a Determination Date, the Amount Financed minus an amount equal to the sum, as of the close of business on the last day of the related Collection Period, of that portion of all amounts received on or prior to such day with respect to such Receivable and allocable to principal using the Simple Interest Method (with respect to Simple Interest Receivables). "Principal Distribution Account" means that account designated as such established and maintained pursuant to Section 5.02(b)(iv). "Purchase Amount" means, with respect to any Receivable that became a Purchased Receivable, the unpaid principal balance owed by the Obligor thereon plus interest on such amount at the applicable APR to the last day of the Collection Period of repurchase. "Purchased Receivable" means a Receivable purchased as of the close of business on the last day of a Collection Period by or on behalf of the Servicer pursuant to Section 4.07 or by or on behalf of the Seller pursuant to the Receivables Purchase Agreement. "Rating Agency" means Fitch, Moody's or Standard & Poor's, as the context may require. If none of Fitch, Moody's, Standard & Poor's or a successor thereto remains in existence, "Rating Agency" shall mean any nationally recognized statistical rating organization or other comparable Person designated by the Depositor and, written notice of which designation shall be given to the Owner Trustee, the Indenture Trustee and the Servicer. "Rating Agency Condition" means, with respect to any action, that each Rating Agency shall have been given 10 days' (or such shorter period as shall be acceptable to each Rating 11 Agency) prior notice thereof and that each Rating Agency shall not have notified the Issuer or the Indenture Trustee in writing that such action will result in a reduction, withdrawal or down-grade of the then-current rating of each class of Notes. "Realized Losses" means, with respect to any Receivable that becomes a Liquidated Receivable, the excess of the Principal Balance thereof over the portion of related Liquidation Proceeds allocable to principal. "Receivable" means any Contract listed on Schedule A (which Schedule may be in the form of microfiche). "Receivable Files" means the following documents with respect to each Financed Vehicle: (i) the fully executed original of each Receivable (together with any agreements modifying each such Receivable, including any extension agreement); (ii) the original credit application, or a copy thereof, fully executed by each Obligor thereon; (iii) the original certificate of title or such other documents evidencing the security interest of the Seller in the related Financed Vehicle; and (iv) any and all other documents that the Servicer shall have kept on file in accordance with its customary procedures relating to Receivables, Obligors or Financed Vehicles. "Receivables Purchase Agreement" means the Receivables Purchase Agreement dated as of November 7, 2003, between HMFC, as Seller, and the Depositor, as amended, supplemented, amended and restated or otherwise modified from time to time. "Record Date" means, as to any Payment Date, the day immediately preceding such Payment Date. "Recoveries" means, with respect to any Receivable that becomes a Liquidated Receivable, monies collected in respect thereof (other than Liquidation Proceeds), from whatever source, net of the sum of any amounts expended by the Servicer for the account of the Obligor and any amounts required by law to be remitted or allocated to the account of the Obligor. "Regular Principal Distribution Amount" means, with respect to any Payment Date, an amount no less than zero equal to the excess, if any, of (i) the aggregate outstanding principal amount of the Notes immediately preceding such Payment Date over (ii)(a) the Adjusted Pool Balance as of the last day of the related Collection Period minus (b) the Target Overcollateralization Amount with respect to such Payment Date; provided, however, that the Regular Principal Distribution Amount shall not exceed the sum of the aggregate outstanding principal amount of all of the Notes on such Payment Date (after giving effect to any principal payments made on the Notes on such Payment Date in respect of the First Priority Principal Distribution Amount, the Second Priority Principal Distribution Amount, and the Third Priority 12 Principal Distribution Amount, if any); and provided further, that the Regular Principal Distribution Amount on or after the Class D Stated Maturity Date shall not be less than the amount that is necessary to reduce the outstanding principal amount of the Class D Notes to zero. "Required Yield Supplement Overcollateralization Amount" means with respect to any Payment Date, the dollar amount set forth next to such Payment Date on Schedule B hereto. "Reserve Account" means the account designated as such, established by the Issuer and maintained by the Indenture Trustee pursuant to Section 5.02(b)(iii). "Reserve Account Deposit" means $5,855,027.57. "Reserve Account Required Amount" means with respect to any Payment Date, an amount equal to 0.75% of the Adjusted Pool Balance as of the Cutoff Date; provided, however, that in no event shall the Reserve Account Required Amount on any Payment Date be more than the aggregate outstanding principal amount of the Notes on such Payment Date (after giving effect to the allocation of principal payments on such Payment Date). "Reserve Account Withdrawal Amount" means, with respect to each Payment Date, the lesser of (x) the Available Amounts Shortfall with respect to such Payment Date and (y) and the amount on deposit in the Reserve Account on such Payment Date. "Responsible Officer" means the chairman of the board, the president, any executive vice president, any vice president, the treasurer, any assistant treasurer, the secretary, or any assistant secretary of the Servicer. "Scheduled Payment" means, with respect to each Receivable, the scheduled monthly payment amount set forth in the related Contract and required to be paid by the Obligor during each Collection Period. "Second Priority Principal Distribution Amount" means, with respect to any Payment Date, an amount not less than zero equal to (i) the sum of the aggregate outstanding principal amount of the Class A Notes and the Class B Notes as of the preceding Payment Date (after giving effect to any principal payments made on the Class A Notes and the Class B Notes on that preceding Payment Date), minus (ii) the Adjusted Pool Balance at the end of the Collection Period preceding that Payment Date, minus (iii) the First Priority Principal Distribution Amount; provided, however, that the Second Priority Principal Distribution Amount shall not exceed the sum of the aggregate outstanding principal amount of all of the Notes on that Payment Date (after giving effect to any principal payments made on the Notes on that preceding Payment Date); and provided further, that the Second Priority Principal Distribution Amount on and after the Class B Maturity Date shall not be less than the amount that is necessary to reduce the outstanding principal amount of the Class B Notes to zero. "Securities" means the Notes and the Certificates. "Securities Account Control Agreement" means the Securities Account Control Agreement dated as of November 7, 2003 between the Trust, the Indenture Trustee and the 13 Securities Intermediary, as amended, supplemented, amended and restated or otherwise modified from time to time. "Securities Intermediary" means Wells Fargo Bank Minnesota, National Association, in its capacity as the securities intermediary in the Securities Account Control Agreement. "Securityholders" means the Noteholders and/or the Certificateholders, as the context may require. "Seller" means HMFC and its successors in interest as seller of the Receivables to the Depositor pursuant to the Receivables Purchase Agreement. "Servicer" means HMFC, as the servicer of the Receivables, and each successor to HMFC (in the same capacity) pursuant to Section 7.03 or 8.03. "Servicer Termination Event" has the meaning set forth in Section 8.01. "Servicer's Certificate" means an Officers' Certificate of the Servicer delivered pursuant to Section 4.09, substantially in the form of Exhibit C. "Servicing Fee" means an amount equal to the product of the Servicing Fee Rate and the Pool Balance as of the first day of the related Collection Period. "Servicing Fee Rate" means 1.0% per annum. "Simple Interest Method" means the method of allocating the monthly payments received with respect to a Receivable to interest in an amount equal to the product of (i) the applicable APR, (ii) the period of time (expressed as a fraction of a year, based on the actual number of days in the calendar month and 365 days in the calendar year) elapsed since the preceding payment was made under such Receivable and (iii) the outstanding principal amount of such Receivable, and allocating the remainder of each such monthly payment to principal. "Simple Interest Receivable" means any Receivable under which the portion of a payment allocable to interest and the portion allocable to principal is determined in accordance with the Simple Interest Method. "Standard & Poor's" means Standard & Poor's, a division of The McGraw-Hill Companies, Inc., and its successors. "Stated Maturity Date" means, for each class of Notes, the respective date set forth opposite such class of Notes in the table below or, if such date is not a Business Day, the next succeeding Business Day: 14
Class Stated Maturity Date - --------------- -------------------- Class A-1 Notes November 15, 2004 Class A-2 Notes September 15, 2006 Class A-3 Notes November 15, 2007 Class A-4 Notes October 15, 2010 Class B Notes October 15, 2010 Class C Notes October 15, 2010 Class D Notes October 15, 2010
"Target Overcollateralization Amount" means, with respect to any Payment Date, the greater of (a) 9.00% of the Adjusted Pool Balance, minus amounts on deposit in the Reserve Account after withdrawals from the Reserve Account but prior to deposits to the Reserve Account, in each case, on such Payment Date and (b) 1.25% of the Adjusted Pool Balance as of the Cut-off Date. Notwithstanding the foregoing, the Target Overcollateralization Amount shall not exceed the Adjusted Pool Balance on such Payment Date. "Third Priority Principal Distribution Amount" means, with respect to any Payment Date, an amount not less than zero equal to (i) the sum of the aggregate outstanding principal amount of the Class A Notes, the Class B Notes and the Class C Notes as of the preceding Payment Date (after giving effect to any principal payments made on the Class A Notes, the Class B Notes and the Class C Notes on that preceding Payment Date), minus (ii) the Adjusted Pool Balance at the end of the Collection Period, minus (iii) the First Priority Principal Distribution Amount, minus (iv) the Second Priority Principal Distribution Amount; provided, however, that the Third Priority Principal Distribution Amount shall not exceed the sum of the aggregate outstanding principal amount of all of the Notes on that Payment Date (after giving effect to any principal payments made on the Notes on that preceding Payment Date); and provided further, that the Third Priority Principal Distribution Amount on and after the Class C Maturity Date shall not be less than the amount that is necessary to reduce the outstanding principal amount of the Class C Notes to zero. "Total Required Payment" means (a) with respect to any Payment Date prior to the occurrence of an "Event of Default" under the Indenture which has resulted in the acceleration of the Notes, the sum of (i) the Servicing Fee for the related Collection Period and all unpaid Servicing Fees from prior Collection Periods, (ii) unreimbursed Advances, (iii) the accrued and unpaid interest on the Notes, (iv) an amount equal to the change in the Adjusted Pool Balance during the related Collection Period, and (v) on or after the Stated Maturity Date of any class of Notes, an amount necessary to reduce the outstanding principal amount of such class of Notes to zero, and (b) with respect to any Payment Date following the occurrence and during the continuation of an "Event of Default" under the Indenture which has resulted in an acceleration 15 of the Notes, until the Payment Date on which the outstanding principal amount of all the Notes has been paid in full, the sum of (i) the specified amounts payable to the Indenture Trustee, (ii) the Servicing Fee for the related Collection Period and all unpaid Servicing Fees from prior Collection Periods, (iii) unreimbursed Advances, (iv) the accrued and unpaid interest on the Notes and (v) the amount necessary to reduce the outstanding principal amount of all the Notes to zero. "Trust" means the Issuer. "Trust Account Property" means the Trust Accounts, all amounts and investments held from time to time in any Trust Account and all proceeds of the foregoing. "Trust Accounts" shall mean the Collection Account, the Note Distribution Account and the Reserve Account. "Trust Agreement" means the Amended and Restated Trust Agreement, dated as of November 7, 2003, between the Depositor, the Administrator and the Owner Trustee, as amended, supplemented, amended and restated or otherwise modified from time to time. "Trust Officer" means, in the case of the Indenture Trustee or any Officer within the Corporate Trust Office of the Indenture Trustee, as the case may be, including any Assistant Vice President, Assistant Treasurer, Assistant Secretary or any other officer of the Indenture Trustee customarily performing functions similar to those performed by any of the above designated officers and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer's knowledge of and familiarity with the particular subject and, with respect to the Owner Trustee, any officer in the Corporate Trust Administration Department of the Owner Trustee with direct responsibility for the administration of the Trust Agreement and the other Basic Documents on behalf of the Owner Trustee. "UCC" means the Uniform Commercial Code, as in effect in the relevant jurisdiction. Section 1.02 Other Definitional Provisions. (a) Capitalized terms used herein that are not otherwise defined has the meanings ascribed thereto in the Indenture or, if not defined therein, in the Trust Agreement. (b) All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein. (c) As used in this Agreement and in any certificate or other document made or delivered pursuant hereto or thereto, accounting terms not defined in this Agreement or in any such certificate or other document, and accounting terms partly defined in this Agreement or in any such certificate or other document to the extent not defined, shall have the respective meanings given to them under generally accepted accounting principles. To the extent that the definitions of accounting terms in this Agreement or in any such certificate or other document are inconsistent with the meanings of such terms under generally accepted accounting principles, 16 the definitions contained in this Agreement or in any such certificate or other document shall control. (d) The words "hereof," "herein," "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; Article, Section, Schedule and Exhibit references contained in this Agreement are references to Articles, Sections, Schedules and Exhibits in or to this Agreement unless otherwise specified; "or" shall include "and/or"; and the term "including" shall mean "including without limitation". (e) The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms. (f) Any agreement, instrument or statute defined or referred to herein or in any instrument or certificate delivered in connection herewith means such agreement, instrument or statute as from time to time amended, modified or supplemented and includes (in the case of agreements or instruments) references to all attachments thereto and instruments incorporated therein; references to a Person are also to its permitted successors and assigns. ARTICLE II. CONVEYANCE OF RECEIVABLES Section 2.01 Conveyance of Receivables. In consideration of the Issuer's delivery to or upon the order of the Depositor of $751,860,403.72, the Certificates and such other amounts to be distributed to the Depositor on the Closing Date, the Depositor does hereby sell, transfer, assign, set over and otherwise convey to the Issuer, without recourse (subject to the obligations of the Depositor set forth herein), all right, title and interest of the Depositor in and to: (i) the Receivables and all moneys received thereon on or after the Cutoff Date; (ii) the security interests in the Financed Vehicles and any accessions thereto granted by Obligors pursuant to the Receivables and any other interest of the Depositor in such Financed Vehicles; (iii) any Liquidation Proceeds and any other proceeds with respect to the Receivables from claims on any physical damage, credit life or disability insurance policies covering the Financed Vehicles or the related Obligors, including any vendor's single interest or other collateral protection insurance policy; (iv) any property that shall have secured a Receivable and shall have been acquired by or on behalf of the Depositor, the Servicer or the Trust; (v) all documents and other items contained in the Receivable Files; 17 (vi) all of the Depositor's rights (but not its obligations) under the Receivables Purchase Agreement; (vii) all right, title and interest in the Trust Accounts and all funds, securities or other assets credited from time to time to the Trust Accounts and in all investments therein and proceeds thereof (including all Investment Earnings thereon); (viii) any proceeds from any Receivable repurchased by a Dealer pursuant to a Dealer Agreement; and (ix) the proceeds of any and all of the foregoing (collectively, with the assets listed in clauses (i) through (viii) above, the "Conveyed Assets"). It is the intention of the Depositor that the transfer and assignment contemplated by this Agreement shall constitute a sale of the Conveyed Assets from the Depositor to the Trust and the beneficial interest in and title to the Receivables and the related property shall not be part of the Depositor's estate in the event of the filing of a bankruptcy petition by or against the Depositor under any bankruptcy law. In the event that, notwithstanding the intent of the Depositor, the transfer and assignment contemplated hereby is held not to be a sale or is otherwise not effective to sell the Conveyed Assets, this Agreement shall constitute a grant by the Depositor to the Issuer of a security interest in all Conveyed Assets and all accounts, money, chattel paper, securities, instruments, documents, deposit accounts, uncertificated securities, general intangibles, contract rights, goods and other property consisting of, arising from or relating to such Conveyed Assets, for the benefit of the Securityholders. ARTICLE III. THE RECEIVABLES Section 3.01 Representations and Warranties of the Seller. (a) The Seller has made each of the representations and warranties set forth in Exhibit A hereto under the Receivables Purchase Agreement and has consented to the assignment by the Depositor to the Issuer of the Depositor's rights with respect thereto. Such representations and warranties speak as of the execution and delivery of this Agreement and as of the Closing Date, but shall survive the sale, transfer and assignment of the Receivables to the Issuer and the pledge of such Receivables to the Indenture Trustee. Pursuant to Section 2.01 of this Agreement, the Depositor has sold, assigned, transferred and conveyed to the Issuer, as part of the assets of the Issuer, its rights under the Receivables Purchase Agreement, including the representations and warranties of the Seller therein as set forth in Exhibit A, upon which representations and warranties the Issuer relies in accepting the Receivables and delivering the Securities, together with all rights of the Depositor with respect to any breach thereof, including the right to require the Seller to repurchase Receivables in accordance with the Receivables Purchase Agreement. It is understood and agreed that the representations and warranties referred to in this Section shall survive the sale and delivery of the Receivables to the Issuer. 18 (b) The Seller hereby agrees that the Issuer shall have the right to enforce any and all rights under the Receivables Purchase Agreement assigned to the Issuer herein, including the right to cause the Seller to repurchase any Receivable with respect to which it is in breach of any of its representations and warranties set forth in Exhibit A, directly against the Seller as though the Issuer were a party to the Receivables Purchase Agreement, and the Issuer shall not be obligated to exercise any such rights indirectly through the Depositor. Section 3.02 Representations and Warranties of the Depositor. The Depositor makes the following representations and warranties, on which the Issuer relies in accepting the Receivables and delivering the Securities. Such representations and warranties speak as of the execution and delivery of this Agreement and as of the Closing Date, but shall survive the sale, transfer and assignment of the Receivables by the Depositor to the Issuer and the pledge thereof to the Indenture Trustee pursuant to the Indenture: (a) Title. The Depositor shall convey to the Issuer all right, title and interest of the Depositor in and to the Receivables. (b) All Filings Made. The Depositor has caused all filings (including UCC filings) to be made in New York and Delaware with respect to the sale of the Receivables to the Issuer and the pledge contemplated in the Basic Documents to the Indenture Trustee. (c) Liens. The Depositor has not taken any actions to create, incur or suffer to exist any Lien on or restriction on transferability of any Receivable except for the Lien of the Indenture and the restrictions on transferability imposed by this Agreement. Section 3.03 Repurchase Upon Breach. The Depositor, the Owner Trustee, the Indenture Trustee, the Seller, and the Servicer shall inform the other parties to this Agreement promptly, in writing, upon the discovery of any breach of the Seller's representations and warranties made pursuant to Section 3.01 of this Agreement or Section 3.02 of the Receivables Purchase Agreement, without regard to any limitation set forth in such representation or warranty concerning the knowledge of the Seller as to the facts stated therein. The occurrence of a breach of any of the Seller's representations and warranties contained in Section 3.02(b) of the Receivables Purchase Agreement with respect to any Receivable shall constitute an event obligating the Seller to repurchase such Receivables if the interests of the Depositor, the Indenture Trustee, the Owner Trustee, the Issuer and the Securityholders are materially and adversely affected by such breach (each, a "Repurchase Event"), at the Purchase Amount, from the Depositor or from the Issuer, as applicable, unless any such breach shall have been cured by the last day of the first Collection Period following the discovery or notice thereof by or to the Seller or the Servicer. In consideration of the repurchase of any such Receivable, the Seller shall remit the Purchase Amount to the Collection Account and notify in writing the Indenture Trustee of such deposit, in the manner specified in Section 5.04. The sole remedy of the Issuer, the Indenture Trustee, the Noteholders, or the Certificateholders with respect to a breach of representations and warranties pursuant to Section 3.01 of this Agreement or Section 3.02 of the Receivables Purchase Agreement or the agreement contained in this Section shall be to require the Servicer to purchase Receivables pursuant to this Section or the Seller to repurchase Receivables pursuant to the Receivables Purchase Agreement. 19 ARTICLE IV. ADMINISTRATION AND SERVICING OF RECEIVABLES Section 4.01 Duties of Servicer. The Servicer, for the benefit of the Issuer and the Indenture Trustee, shall manage, service, administer and make collections on the Receivables and perform the other actions required of the Servicer under this Agreement. The Servicer shall service the Receivables in accordance with its customary and usual procedures and consistent with the procedures employed by institutions that service motor vehicle retail installment sale contracts. The Servicer's duties shall include the collection and posting of all payments, responding to inquiries of Obligors, investigating delinquencies, sending payment statements to Obligors, reporting any required tax information to Obligors, monitoring the Collateral, accounting for collections, furnishing monthly and annual statements to the Owner Trustee and the Indenture Trustee with respect to distributions and performing the other duties specified herein. The Servicer also shall administer and enforce all rights of the holder of the Receivables under the Receivables and the Dealer Agreements. To the extent consistent with the standards, policies and procedures otherwise required hereby and the Credit and Collection Policy, the Servicer shall follow its customary standards, policies and procedures and shall have full power and authority, acting alone, to do any and all things in connection with the managing, servicing, administration and collection of the Receivables that it may deem necessary or desirable. Without limiting the generality of the foregoing, the Servicer is hereby authorized and empowered to execute and deliver, on behalf of itself, the Issuer, the Owner Trustee, the Indenture Trustee, the Certificateholders and the Noteholders, or any of them, any and all instruments of satisfaction or cancellation, or of partial or full release or discharge, and all other comparable instruments with respect to the Receivables and with respect to the Financed Vehicles; provided, however, that notwithstanding the foregoing, the Servicer shall not, except pursuant to an order from a court of competent jurisdiction or as required by applicable law, release an Obligor from payment of any unpaid amount due under any Receivable, reduce the related APR or waive the right to collect the unpaid balance of any Receivable from an Obligor. The Servicer is hereby authorized to commence, in its own name or in the name of the Issuer, the Indenture Trustee, the Owner Trustee, the Certificateholders or the Noteholders, a legal proceeding to enforce a Receivable pursuant to Section 4.03 or to commence or participate in any other legal proceeding (including a bankruptcy proceeding) relating to or involving a Receivable, an Obligor or a Financed Vehicle. If the Servicer commences or participates in any such legal proceeding in its own name, the Indenture Trustee or the Issuer shall thereupon be deemed to have automatically assigned the applicable Receivable to the Servicer solely for purposes of commencing or participating in such proceeding as a party or claimant, and the Servicer is authorized and empowered by the Indenture Trustee or the Issuer to execute and deliver in the Indenture Trustee's or the Issuer's name any notices, demands, claims, complaints, responses, affidavits or other documents or instruments in connection with any such proceeding. If in any enforcement suit or legal proceeding it shall be held that the Servicer may not enforce a Receivable on the ground that it shall not be a real party in interest or a holder entitled to enforce such Receivable, the Owner Trustee shall, at the Servicer's expense and direction, take steps to enforce such Receivable, including bringing suit in its name or the name of the Issuer, the Indenture Trustee, the Certificateholders or the Noteholders. The Owner Trustee and the Indenture Trustee shall upon the written request of the Servicer furnish the Servicer with any 20 powers of attorney and other documents reasonably necessary or appropriate to enable the Servicer to carry out its servicing and administrative duties hereunder. Section 4.02 Collection of Receivable Payments; Modifications of Receivables. (a) Consistent with the standards, policies and procedures required by this Agreement, the Servicer shall make reasonable efforts to collect all payments called for under the terms and provisions of the Receivables as and when the same shall become due, and shall follow such collection procedures as it follows with respect to all comparable motor vehicle receivables that it services for itself or others and otherwise act with respect to the Receivables in such a manner as will, in the reasonable judgment of the Servicer, maximize the amount to be received by the Trust with respect thereto. The Servicer is authorized in its discretion to waive any prepayment charge, late payment charge or any other similar fees that may be collected in the ordinary course of servicing any Receivable. (b) The Servicer may grant payment extensions in accordance with its customary procedures if the Servicer believes in good faith that such extension is necessary to avoid a default on such Receivable, will maximize the amount to be received by the Trust with respect to such Receivable and is otherwise in the best interests of the Trust; provided, that no such extension shall extend the final payment date on any Receivable beyond the last day of the Collection Period ending three months prior to the Class D Maturity Date. Anything herein to the contrary notwithstanding, the Servicer shall grant payment extensions with respect to a Receivable only to the extent permissible in its extension policy in effect from time to time, which policy in effect as of the date hereof is attached hereto as Exhibit D. Generally, a Contract may be extended for at most one month per extension and there may not be more than six extensions during the life of the Contract. (c) Upon any extension not in accordance with this Section, the Servicer shall be required to purchase the related Receivable in accordance with Section 4.07. Section 4.03 Realization upon Receivables. Consistent with the standards, policies and procedures required by this Agreement and the Credit and Collection Policy, the Servicer shall use its best efforts to repossess or otherwise convert the ownership of and liquidate any Financed Vehicle securing a Receivable with respect to which the Servicer shall have determined that eventual payment in full is unlikely. The Servicer shall begin such repossession and conversion procedures as soon as practicable after default on such Receivable; provided, however, that the Servicer may elect not to repossess a Financed Vehicle within such time period if in its good faith judgment it determines that the proceeds ultimately recoverable with respect to such Receivable would be increased by forbearance. In repossessing or otherwise converting the ownership of a Financed Vehicle and liquidating a Receivable, the Servicer is authorized to follow such customary practices and procedures as it shall deem necessary or advisable, consistent with the standard of care required by Section 4.01, which practices and procedures may include reasonable efforts to realize upon any recourse to Dealers, the sale of the related Financed Vehicle at public or private sale, the submission of claims under an insurance policy and other actions by the Servicer in order to realize upon a Receivable; provided, however, that in any case in which the Financed Vehicle shall have suffered damage, the Servicer shall not expend funds in connection with any repair or towards the repossession of such Financed 21 Vehicle unless it shall determine in its reasonable judgment that such repair or repossession shall increase the related Liquidation Proceeds by an amount materially greater than the expense for such repair or repossession. The Servicer shall be entitled to recover all reasonable expenses incurred by it in the course of repossessing and liquidating a Financed Vehicle into cash proceeds, but only out of the cash proceeds of the sale of such Financed Vehicle, any deficiency obtained from the related Obligor or any amounts received from recourse to the related Dealer. Section 4.04 Physical Damage Insurance. The Servicer shall, in accordance with its customary servicing procedures, require each Obligor to obtain and maintain physical loss damage insurance covering the related Financed Vehicle as of the execution of the related Receivable. Section 4.05 Maintenance of Security Interests in Financed Vehicles. (a) The Servicer shall, in accordance with its customary servicing procedures, take such steps as are necessary to maintain perfection of the security interest created by each Receivable in the related Financed Vehicle. The Servicer is hereby authorized to take such steps as are necessary to re-perfect such security interest on behalf of the Issuer and the Indenture Trustee in the event of the relocation of a Financed Vehicle, or for any other reason. In the event that the assignment of a Receivable to the Issuer is insufficient, without a notation on the related Financed Vehicle's certificate of title, or without fulfilling any additional administrative requirements under the laws of the state in which such Financed Vehicle is located, to perfect a security interest in the related Financed Vehicle in favor of the Issuer, the Servicer hereby agrees that the designation of HMFC as the secured party on the certificate of title is in its capacity as agent of the Issuer. (b) The Depositor, the Trust, the Indenture Trustee, and the Servicer hereby agree that, upon a Servicer Termination Event, the Indenture Trustee may take or cause to be taken such actions as may, in the opinion of counsel to the Indenture Trustee, be necessary to perfect or re-perfect the security interests in the Financed Vehicles in the name of the Issuer, including by amending the title documents of the Financed Vehicles. The Servicer hereby agrees to pay all expenses related to such perfection or reperfection and to take all action necessary therefor. Section 4.06 Covenants of Servicer. By its execution and delivery of this Agreement, the Servicer hereby covenants as follows (upon which covenants the Issuer, the Indenture Trustee and the Owner Trustee rely in accepting the Receivables and delivering the applicable Securities): (a) Liens in Force. No Financed Vehicle securing a Receivable shall be released in whole or in part from the security interest granted by such Receivable, except upon payment in full of such Receivable or as otherwise contemplated herein; (b) No Impairment. The Servicer shall do nothing to impair the rights of the Trust in the property of the Trust; (c) No Amendments. The Servicer shall not extend or otherwise amend the terms of any Receivable, except in accordance with Section 4.02 and the Servicer shall not 22 amend or modify the Credit and Collection Policy if such amendment or modification may have a material adverse effect on the interest of the Noteholders; and (d) Restrictions on Liens. The Servicer shall not (A) create, incur or suffer to exist, or agree to create, incur or suffer to exist, or consent to or permit in the future (upon the occurrence of a contingency or otherwise) the creation, incurrence or existence of any Lien on or restriction on transferability of any Receivable except for the Lien of the Indenture and the restrictions on transferability imposed by this Agreement or (B) file any UCC financing statements in any jurisdiction that names HMFC, the Servicer or the Depositor as a debtor, and any Person other than the Depositor, the Indenture Trustee or the Issuer as a secured party, or sign any security agreement authorizing any secured party thereunder to file any such financing statement with respect to the Receivables or the related property. Section 4.07 Purchase of Receivables Upon Breach. Upon discovery by any of the Servicer, the Seller, the Depositor, the Owner Trustee, or the Indenture Trustee of a breach of any of the covenants set forth in Sections 4.02, 4.05 or 4.06, the party discovering such breach shall give prompt written notice to the other parties; provided, however, that the failure to give any such notice shall not affect any obligation of the Servicer under this Section 4.07. On or before the last day of the first Collection Period following its discovery or receipt of notice of the breach of any covenant set forth in Sections 4.02, 4.05 or 4.06 that materially and adversely affects the interests of the Issuer, the Indenture Trustee, the Owner Trustee, the Certificateholders or the Noteholders in any Receivable, the Servicer shall, unless such breach shall have been cured in all material respects by such date, purchase from the Issuer the Receivable affected by such breach. In consideration of the purchase of any such Receivable, the Servicer shall remit the related Purchase Amount into the Collection Account, with written notice to the Indenture Trustee of such deposit, in the manner specified in Section 5.04. Subject to Section 7.02, it is understood and agreed that the obligation of the Servicer to purchase any Receivable with respect to which such a breach has occurred and is continuing shall, if such obligation is fulfilled, constitute the sole remedy against the Servicer for such breach available to the Issuer, the Owner Trustee, the Indenture Trustee, the Certificateholders or the Noteholders. Section 4.08 Servicing Fee. The Servicing Fee shall be payable to the Servicer on each Payment Date. The Servicing Fee shall be calculated on the basis of a 360-day year comprised of twelve 30-day months. The Servicer shall be required to pay all expenses incurred by it in connection with its activities under this Agreement (including taxes imposed on the Servicer and expenses incurred in connection with distributions and reports made by the Servicer to the Owner Trustee and the Indenture Trustee). The Servicer shall be required to pay all of the Indenture Trustee's fees, expenses, reimbursements and indemnifications. Section 4.09 Servicer's Certificate. Not later than 2:00 p.m. (New York City time) on each Determination Date, the Servicer shall deliver to the Owner Trustee, the Indenture Trustee, and the Depositor, with a copy to each Rating Agency, a Servicer's Certificate containing all information necessary to make the distributions to be made on the related Payment Date pursuant to Section 5.05 for the related Collection Period and any other information the Indenture Trustee may reasonably request and such Servicer's Certificate shall be certified by a Responsible Officer of the Servicer to the effect that the information provided is complete and no defaults have occurred. If any defaults have occurred, such Servicer's Certificate will provide an 23 explanation of such defaults. Receivables to be purchased by the Servicer or to be repurchased by the Seller and each Receivable that became a Liquidated Receivable shall be identified by the Servicer by account number with respect to such Receivable (as specified in the applicable Schedule of Receivables). Section 4.10 Annual Statement as to Compliance, Notice of Servicer Termination Event. (a) The Servicer shall deliver to the Owner Trustee, the Indenture Trustee, and each Rating Agency, within 120 days after the end of the Servicer's fiscal year (or, in the case of the first such certificate, not later than April 30, 2004), an Officer's Certificate signed by a Responsible Officer of the Servicer, stating that (i) a review of the activities of the Servicer during the preceding 12-month period (or such shorter period in the case of the first such Officer's Certificate) and of the performance of its obligations under this Agreement has been made under such officer's supervision and (ii) to such officer's knowledge, based on such review, the Servicer has fulfilled all its obligations under this Agreement throughout such period or, if there has been a default in the fulfillment of any such obligation, specifying each such default known to such officer and the nature and status thereof. (b) The Servicer shall deliver to the Owner Trustee, the Indenture Trustee, and each Rating Agency, promptly after having obtained knowledge thereof, but in no event later than two Business Days thereafter, written notice in an Officer's Certificate of any event that with the giving of notice or lapse of time or both would become a Servicer Termination Event under Section 8.01. Section 4.11 [Reserved] Section 4.12 Access to Certain Documentation and Information Regarding Receivables. The Servicer shall provide to representatives of the Owner Trustee, the Indenture Trustee, the Certificateholders and the Noteholders reasonable access to the documentation regarding the Receivables and the related Trust property. Access shall be afforded without charge, but only upon reasonable request and during the normal business hours at the offices of the Servicer. Nothing in this Section shall affect the obligation of the Servicer to observe any applicable law prohibiting disclosure of information regarding the Obligors and the failure of the Servicer to provide access to information as a result of such obligation shall not constitute a breach of this Section. Section 4.13 Term of Servicer. The Servicer hereby covenants and agrees to act as Servicer under, and for the term of, this Agreement, subject to the provisions of Sections 7.03 and 7.06. Section 4.14 Annual Independent Accountants' Report. The Servicer shall cause a firm of independent certified public accountants, which may also render other services to the Servicer or its Affiliates, to deliver to the Owner Trustee, the Indenture Trustee, and each Rating Agency, within 120 days after the end of each fiscal year (or, in the case of the first such report, not later than April 30, 2004), a report addressed to the Board of Directors of the Servicer, the Owner Trustee, and the Indenture Trustee, to the effect that such firm has audited the books and records 24 of the Servicer and issued its report thereon and that (i) such audit was made in accordance with generally accepted auditing standards and accordingly included such tests of the accounting records and such other auditing procedures as such firm considered necessary in the circumstances and (ii) the firm is independent of the Depositor and the Servicer within the meaning of the Code of Professional Ethics of the American Institute of Certified Public Accountants. Section 4.15 Reports to the Commission. The Servicer shall, on behalf of the Issuer, execute and cause to be filed with the Commission any periodic reports required to be filed with respect to the issuance of the Notes under the provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder. The Seller shall, at its expense, cooperate in any reasonable request made by the Servicer in connection with such filings. Section 4.16 Compensation of Indenture Trustee. The Servicer will: (a) pay the Indenture Trustee (and any separate trustee or co-trustee appointed pursuant to Section 6.10 of the Indenture (a "Separate Trustee")) from time to time reasonable compensation for all services rendered by the Indenture Trustee or Separate Trustee, as the case may be, under the Indenture (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (b) except as otherwise expressly provided in the Indenture, reimburse the Indenture Trustee or any Separate Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Indenture Trustee or Separate Trustee, as the case may be, in accordance with any provision of the Indenture (including the reasonable compensation, expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith; (c) indemnify the Indenture Trustee and any Separate Trustee and their respective agents for, and hold them harmless against, any losses, liability or expense incurred without negligence or bad faith on their part, arising out of or in connection with the acceptance or administration of the transactions contemplated by the Indenture and the other Basic Documents, including the reasonable costs and expenses of defending themselves against any claim or liability in connection with the exercise or performance of any of their powers or duties under the Indenture; and (d) indemnify the Owner Trustee and its agents, successors, assigns and servants in accordance with Section 8.02 of the Trust Agreement to the extent that amounts thereunder have not been paid pursuant to Section 5.05 of this Agreement. ARTICLE V. DISTRIBUTIONS; STATEMENTS TO SECURITYHOLDERS Section 5.01 Post Office Box. All payments and other proceeds of any type and from any source on or with respect to the Receivables that are delivered to a Post Office Box shall be 25 the property of the Trust, subject to the Lien of the Indenture and the rights of the Indenture Trustee thereunder. Section 5.02 Accounts. (a) The Servicer has established an account or accounts in the name of HMFC (the "Local Remittance Account"). All payments on the Receivables mailed by Obligors or any other Person to a Post Office Box or otherwise delivered to the Servicer shall be deposited by Citibank N.A., as remittance processor, or the Servicer, as applicable, on a daily basis into the Local Remittance Account, from which the available funds related to the Receivables will be swept by the Servicer within two Business Days to the Collection Account; provided, however, that if the Servicer fails to transfer such payments to the Collection Account within two Business Days or the Servicer shall for any reason no longer be acting as Servicer, HMFC at its expense shall deliver to the successor Servicer all documents and records relating to the Post Office Boxes and cause Citibank N.A. to transfer payments related to the Receivables directly from the Post Office Box to the Collection Account. Amounts on deposit in the Local Remittance Account shall not be invested. (b) (i) On or prior to the Closing Date, the Servicer shall establish, or cause to be established, an account with and in the name of the Indenture Trustee (the "Collection Account"), which shall be maintained as an Eligible Deposit Account and shall bear a designation clearly indicating that the amounts deposited thereto are held for the benefit of the Noteholders and Certificateholders. (ii) The Issuer, for the benefit of the Noteholders, shall cause the Servicer to establish with and maintain in the name of the Indenture Trustee an Eligible Deposit Account (the "Note Distribution Account"), bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Noteholders. (iii) The Issuer, for the benefit of the Noteholders, shall cause the Servicer to establish with and maintain in the name of the Indenture Trustee an Eligible Deposit Account (the "Reserve Account"), bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Noteholders. (iv) The Issuer shall also cause to be established two administrative subaccounts within the Note Distribution Account, which subaccounts shall be designated the "Interest Distribution Account" and the "Principal Distribution Account", respectively. The Interest Distribution Account and the Principal Distribution Account are established and maintained solely for administrative purposes. (v) Funds on deposit in the Reserve Account shall be invested by the Indenture Trustee in Eligible Investments selected in writing by the Servicer; provided, however, that if the Servicer fails to select any Eligible Investment, the Indenture Trustee shall invest such funds in an Eligible Investment described in clause (d) of such definition. All such Eligible Investments shall be held by the Indenture Trustee for the benefit of the Noteholders and/or the Certificateholders, as applicable. Other than as permitted in writing by the Rating Agencies, funds on deposit in the Reserve Account 26 shall be invested in Eligible Investments that will mature not later than the Business Day immediately preceding the next Payment Date. Funds deposited in the Reserve Account, upon the maturity of any Eligible Investments on a day which immediately precedes a Payment Date, are not required to be invested overnight. (vi) Funds on deposit in the Collection Account shall be invested by the Indenture Trustee in Eligible Investments selected in writing by the Servicer; provided, however, that if the Servicer fails to select any Eligible Investment, the Indenture Trustee shall invest such funds in an Eligible Investment described in clause (d) of such definition. All such Eligible Investments shall be held by the Indenture Trustee for the benefit of the Noteholders and/or the Certificateholders, as applicable. Funds on deposit in the Collection Account shall be invested in Eligible Investments that will mature not later than the Business Day immediately preceding the next Payment Date. Funds deposited in the Collection Account, upon the maturity of any Eligible Investments on a day which immediately precedes a Payment Date, are not required to be invested overnight. Investment earnings on funds deposited in the Collection Account, net of losses and investment expenses, shall be released to the Servicer on each Payment Date and shall be the property of the Servicer. (c) (i) The Indenture Trustee shall possess all right, title and interest in all funds received and all funds on deposit from time to time in a Post Office Box and the Local Remittance Account in each case only with respect to the Receivables, the Trust Accounts and in all proceeds thereof (including all income thereon). The Trust Accounts shall be under the sole dominion and control of the Indenture Trustee for the benefit of the Noteholders and the Certificateholders, as the case may be. If, at any time, a Trust Account ceases to be an Eligible Deposit Account, the Indenture Trustee (or the Servicer on its behalf) shall within 5 Business Days (or such longer period, not to exceed 15 calendar days, as to which each Rating Agency may consent) establish a new Trust Account as an Eligible Deposit Account and shall transfer any cash or any investments from the account that is no longer an Eligible Deposit Account to the Trust Account. (ii) With respect to the Trust Account Property, the Indenture Trustee agrees, by its acceptance thereof, that: (A) any Trust Account Property that is held in deposit accounts shall be held solely in the Eligible Deposit Accounts, subject to the last sentence of Section 5.02(c)(i); and each such Eligible Deposit Account shall be subject to the exclusive custody and control of the Indenture Trustee, and the Indenture Trustee shall have sole signature authority with respect thereto; (B) any Trust Account Property that constitutes Physical Property which is delivered to the Indenture Trustee in accordance with paragraph (a) of the definition of "Delivery" shall be held, pending maturity or disposition, solely by the Indenture Trustee or a securities intermediary (as such term is defined in Section 8-102(a)(14) of the UCC) acting solely for the Indenture Trustee; 27 (C) any Trust Account Property that is a book-entry security held through the Federal Reserve System pursuant to federal book-entry regulations which is delivered in accordance with paragraph (b) of the definition of "Delivery" shall be maintained by the Indenture Trustee, pending maturity or disposition, through continued book-entry registration of such Trust Account Property as described in such paragraph; and (D) any Trust Account Property that is an "uncertificated security" under Article VIII of the UCC and that is not governed by clause (C) above which is delivered to the Indenture Trustee in accordance with paragraph (c) of the definition of "Delivery" shall be maintained by the Indenture Trustee, pending maturity or disposition, through continued registration of the Indenture Trustee's (or its nominee's) ownership of such security. (iii) The Servicer shall have the power, revocable by the Indenture Trustee or by the Owner Trustee with the consent of the Indenture Trustee, to instruct the Indenture Trustee in writing to make withdrawals and payments from the Trust Accounts and the Certificate Deposit Account for the purpose of withdrawing any amounts deposited in error into such accounts. Section 5.03 Application of Collections. All payments received from or on behalf of an Obligor during each Collection Period with respect to each Receivable (other than a Purchased Receivable) shall be applied to interest and principal in accordance with the Simple Interest Method. The Servicer shall make all deposits of Collections and other Available Amounts received into the Collection Account on the second Business Day following receipt thereof. However, so long as the Monthly Remittance Condition is satisfied, the Servicer may retain such amounts received during a Collection Period until the Business Day immediately preceding the related Payment Date. Section 5.04 Purchase Amounts. The Servicer or the Seller shall deposit or cause to be deposited in the Collection Account, on or prior to each Determination Date, the aggregate Purchase Amount with respect to Purchased Receivables and the Servicer shall deposit therein all amounts to be paid under Section 4.07. Notice of this amount shall be provided in writing by the applicable party to the Indenture Trustee. Section 5.05 Distributions. (a) On each Determination Date, the Servicer shall calculate all amounts required to be deposited pursuant to this Section and deliver a Servicer's Certificate pursuant to Section 4.09. (b) On each Payment Date, except as specified in Section 5.04(b) of the Indenture, the Servicer shall instruct the Indenture Trustee in writing (based on the information contained in the Servicer's Certificate delivered on the related Determination Date pursuant to Section 4.09) to make the following deposits and distributions from Available Amounts on deposit in the Collection Account, and in the event of an Available Amounts Shortfall from amounts withdrawn from the Reserve Account in the following order and priority: 28 (i) to the Servicer, the Servicing Fee, including any unpaid Servicing Fees with respect to one or more prior Collection Periods, and Advances not previously reimbursed to the Servicer; (ii) to the Interest Distribution Account, (a) the aggregate amount of interest accrued for the related Interest Period on each of the Class A Notes at their respective interest rates on the principal outstanding as of the previous Payment Date after giving effect to all payments of principal to the Class A Noteholders on the preceding Payment Date; and (b) the excess, if any, of the amount of interest payable to the Class A Noteholders on those prior Payment Dates over the amounts actually paid to the Class A Noteholders on those prior Payment Dates, plus interest on any such shortfall at their respective interest rates to the extent permitted by law; (iii) to the Principal Distribution Account, the First Priority Principal Distribution Amount, if any; (iv) to the Interest Distribution Account, (a) the aggregate amount of interest accrued for the related Interest Period on each of the Class B Notes at the Class B Rate on the principal outstanding as of the previous Payment Date after giving effect to all payments of principal to the Class B Noteholders on the preceding Payment Date; and (b) the excess, if any, of the amount of interest payable to the Class B Noteholders on prior Payment Dates over the amounts actually paid to the Class B Noteholders on those prior Payment Dates, plus interest on any such shortfall at the Class B Rate to the extent permitted by law; (v) to the Principal Distribution Account, the Second Priority Principal Distribution Amount, if any; (vi) to the Interest Distribution Account, (a) the aggregate amount of interest accrued for the related Interest Period on each of the Class C Notes at the Class C Rate on the principal outstanding as of the previous Payment Date after giving effect to all payments of principal to the Class C Noteholders on the preceding Payment Date; and (b) the excess, if any, of the amount of interest payable to the Class C Noteholders on prior Payment Dates over the amounts actually paid to the Class C Noteholders on prior Payment Dates, plus interest on any such shortfall at the Class C Rate to the extent permitted by law; (vii) to the Principal Distribution Account, the Third Priority Principal Distribution Amount, if any; (viii) to the Interest Distribution Account, (a) the aggregate amount of interest accrued for the related Interest Period on each of the Class D Notes at the Class D Rate on the principal outstanding as of the previous Payment Date after giving effect to all payments of principal to the Class D Noteholders on the preceding Payment Date; and (b) the excess, if any, of the amount of interest payable to the Class D Noteholders on prior Payment Dates over the amounts actually paid to the Class D Noteholders on prior 29 Payment Dates, plus interest on any such shortfall at the Class D Rate to the extent permitted by law; (ix) to the Principal Distribution Account, the Regular Principal Distribution Amount; (x) to the Reserve Account, from Available Amounts remaining, the amount, if any, necessary to cause the amount on deposit in that account to equal the Reserve Account Required Amount; (xi) to the Indenture Trustee and the Owner Trustee, any accrued and unpaid fees, reimbursements and expenses, in each case to the extent such fees, reimbursements and expenses have not been previously paid by the Servicer and to the Securities Intermediary, any accrued and unpaid indemnification expenses owed to it; and (xii) any Available Amounts remaining, if any, to the Owner Trustee or its agent, for deposit into the Certificate Distribution Account (as defined in the Trust Agreement) and subsequent distribution to the Certificateholder pursuant to Section 5.02 of the Trust Agreement. Section 5.06 Reserve Account. (a) On or prior to the Closing Date, the Issuer shall cause to be deposited an amount equal to the Reserve Account Deposit into the Reserve Account from the net proceeds of the sale of the Notes. The Reserve Account shall be an asset of the Issuer. (b) In the event that the Servicer's Certificate states that there is an Available Amounts Shortfall, then the Indenture Trustee shall, upon written directions from the Servicer, withdraw the Reserve Account Withdrawal Amount from the Reserve Account and deposit such Reserve Account Withdrawal Amount into the Collection Account no later than 12:00 noon, New York City time, on the Business Day prior to the related Payment Date. (c) In the event that the amount on deposit in the Reserve Account (after giving effect to all deposits thereto and withdrawals therefrom on such Business Day on a Payment Date) is greater than the Reserve Account Required Amount on any Payment Date, the Indenture Trustee shall distribute, upon written directions from the Servicer, all such amounts to the Depositor as per the monthly Servicer's Certificate. Upon any such distribution to the Depositor, the Noteholders shall have no further rights in, or claims to, such amounts. (d) In the event that on any Payment Date the amount on deposit in the Reserve Account shall be less than the Reserve Account Required Amount, the Available Amounts remaining after the payment of the amounts set forth in Section 5.05(b)(i) through (ix), up to an amount equal to such shortfall, shall be deposited by the Indenture Trustee, upon written directions from the Servicer, to the Reserve Account on such Payment Date. (e) Subject to Section 9.01, amounts will continue to be applied pursuant to Section 5.05 following the payment in full of the Outstanding Amount of Notes until the Pool Balance is reduced to zero. Following the payment in full of the aggregate Outstanding Amount 30 of the Notes and the Certificates and of all other amounts owing or to be distributed hereunder or under the Indenture or the Trust Agreement to the Noteholders and the termination of the Trust, any amount then allocated to the Reserve Account shall be distributed to the Depositor. Section 5.07 Statements to Securityholders. On each Payment Date, the Servicer shall provide to the Indenture Trustee (with a copy to each Rating Agency) for the Indenture Trustee to forward to each Noteholder of record as of the most recent Record Date and to the Owner Trustee for the Owner Trustee to forward to each Certificateholder of record as of the most recent Record Date a statement substantially in the form of Exhibit B, respectively, setting forth at least the following information as to the Securities to the extent applicable: (i) the amount of collections received with respect to the Receivables during the related Collection Period and allocable to principal allocable to each Class of Notes on such Payment Date; (ii) the amount of collections received with respect to the Receivables during the related Collection Period and allocable to interest allocable to each Class of Notes on such Payment Date; (iii) the Outstanding Amount of each Class of Notes, the Note Pool Factor for each such Class as of the close of business on the last day of the preceding Collection Period, after giving effect to payments allocated to principal reported under clause (i) above; (iv) the amount of the Servicing Fee paid to the Servicer and the amount of any fees payable to the Owner Trustee, or the Indenture Trustee with respect to the related Collection Period; (v) the aggregate amounts of Realized Losses, if any, with respect to the related Collection Period; (vi) the balance of the Reserve Account on the related Determination Date after giving effect to deposits and withdrawals to be made on the relevant Payment Date, if any; (vii) the Pool Balance as of the close of business on the last day of the related Collection Period, after giving effect to payments allocated to principal reported under clause (i) above; (viii) the amount of any deposit to the Reserve Account and the amount and application of any funds withdrawn from the Reserve Account, in each case with respect to such Payment Date; (ix) the aggregate principal balance of all Receivables that became Liquidated Receivables or Purchased Receivables during the related Collection Period; 31 (x) the aggregate principal balance and number of Receivables that are 30 to 60 days, 61 to 90 days or 91 days or more delinquent as of the last day of the related Collection Period; (xi) any Available Amounts Shortfall after giving effect to payments on such Payment Date, and any change in such amounts from the preceding statement; (xii) the aggregate Purchase Amounts for Receivables, if any, that were purchased during or with respect to such Collection Period; (xiii) the aggregate Principal Balance and number of all Receivables with respect to which the related Financed Vehicle was repossessed; (xiv) the aggregate Principal Balance and number of Receivables with respect to which the Servicer granted an extension; (xv) the Required Yield Supplement Overcollateralization Amount for the next Collection Period; and (xvi) any amounts distributed to the Certificateholders. Each amount set forth on the Payment Date statement under clauses (i), (ii) or (iv) above shall be expressed as a dollar amount per $1,000 of original principal balance of a Certificate or Note, as applicable. The Indenture Trustee may make any such statement (and, at its option, any additional files containing the same information in an alternative format) available to the applicable Noteholders via www.CTSLink.com. In connection with providing access to the Indenture Trustee's website, the Indenture Trustee may require registration and the acceptance of a disclaimer. The Indenture Trustee shall have the right to change the way such statements are distributed in order to make such distributions more convenient and/or more accessible to the above parties regarding any such changes; provided, however, that the Indenture Trustee will also mail copies of any such statements to any requesting Noteholder. Section 5.08 Advances by the Servicer. By the close of business on the day required by Section 5.02 hereof, the Servicer may, in its sole discretion, deposit into the Collection Account, out of its own funds, an Advance; provided, however, that the Servicer shall not make any Advances with respect to Defaulted Receivables. ARTICLE VI. THE DEPOSITOR Section 6.01 Representations of Depositor. The Depositor makes the following representations on which the Issuer relies in accepting the Receivables and delivering the Securities. Such representations speak as of the execution and delivery of this Agreement and as 32 of the Closing Date and shall survive the sale, transfer and assignment of the Receivables by the Depositor to the Issuer and the pledge thereof to the Indenture Trustee pursuant to the Indenture. (a) Organization and Good Standing. The Depositor is duly organized and validly existing as a corporation in good standing under the laws of the State of Delaware, with the corporate power and authority to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted. (b) Due Qualification. The Depositor is duly qualified to do business as a foreign corporation in good standing, and has obtained all necessary licenses and approvals, in all jurisdictions where the failure to do so would materially and adversely affect the Depositor's ability to transfer the Receivables to the Trust pursuant to this Agreement or the validity or enforceability of the Receivables. (c) Power and Authority. The Depositor has the corporate power and authority to execute and deliver this Agreement and the other Basic Documents to which it is a party and to carry out their respective terms; the Depositor has full power and authority to sell and assign the property to be sold and assigned to and deposited with the Issuer, and the Depositor shall have duly authorized such sale and assignment to the Issuer by all necessary corporate action; and the execution, delivery and performance of this Agreement and the other Basic Documents to which the Depositor is a party have been and will be duly authorized by the Depositor by all necessary corporate action. (d) Binding Obligation. This Agreement and the other Basic Documents to which the Depositor is a party, when duly executed and delivered by the other parties hereto and thereto, shall constitute legal, valid and binding obligations of the Depositor, enforceable against the Depositor in accordance with their respective terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization or similar laws now or hereafter in effect relating to or affecting creditors' rights generally and to general principles of equity (whether applied in a proceeding at law or in equity). (e) No Violation. The consummation of the transactions contemplated by this Agreement and the other Basic Documents and the fulfillment of the terms of this Agreement and the other Basic Documents shall not conflict with, result in any breach of any of the terms or provisions of or constitute (with or without notice or lapse of time, or both) a default under, the certificate of incorporation or bylaws of the Depositor, or any indenture, agreement, mortgage, deed of trust or other instrument to which the Depositor is a party or by which it is bound; or result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement, mortgage, deed of trust or other instrument, other than this Agreement and the other Basic Documents; or violate any law, order, rule or regulation applicable to the Depositor of any court or federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Depositor or its properties. (f) No Proceedings. There are no proceedings or investigations pending or, to the Depositor's knowledge, threatened, against the Depositor before any court, regulatory body, administrative agency or other tribunal or governmental instrumentality having jurisdiction over 33 the Depositor or its properties: (i) asserting the invalidity of this Agreement or any other Basic Document; (ii) seeking to prevent the issuance of the Notes or the Certificates or the consummation of any of the transactions contemplated by this Agreement or any other Basic Document; (iii) seeking any determination or ruling that might materially and adversely affect the performance by the Depositor of its obligations under, or the validity or enforceability of, this Agreement or any other Basic Document; or (iv) seeking to adversely affect the federal income tax attributes of the Trust, the Notes or the Certificates. (g) No Consents. The Depositor is not required to obtain the consent of any other party or any consent, license, approval, registration, authorization, or declaration of or with any governmental authority, bureau or agency in connection with the execution, delivery, performance, validity or enforceability of this Agreement or any other Basic Document to which it is a party that has not already been obtained. Section 6.02 Corporate Existence. During the term of this Agreement, the Depositor will keep in full force and effect its existence, rights and franchises as a corporation under the laws of the jurisdiction of its incorporation and will obtain and preserve its qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Agreement, the Basic Documents and each other instrument or agreement necessary or appropriate to the proper administration of this Agreement and the transactions contemplated hereby. In addition, all transactions and dealings between the Depositor and its Affiliates will be conducted on an arm's-length basis. Section 6.03 Liability of Depositor; Indemnities. The Depositor shall be liable in accordance herewith only to the extent of the obligations specifically undertaken by the Depositor under this Agreement (which shall not include distributions on account of the Notes or the Certificates). Section 6.04 Merger or Consolidation of, or Assumption of the Obligations of, Depositor. The Depositor shall not merge or consolidate with any other Person or permit any other Person to become the successor to the Depositor's business. Section 6.05 Amendment of Depositor's Organizational Documents. The Depositor shall not amend its organizational documents except in accordance with the provisions thereof. ARTICLE VII. THE SERVICER Section 7.01 Representations of Servicer. The Servicer makes the following representations upon which the Issuer is deemed to have relied in acquiring the Receivables. Such representations speak as of the execution and delivery of this Agreement and as of the Closing Date and shall survive the sale of the Receivables to the Issuer and the pledge thereof to the Indenture Trustee pursuant to the Indenture. (a) Organization and Good Standing. The Servicer is duly organized and validly existing as a corporation in good standing under the laws of the State of its incorporation, 34 with the corporate power and authority to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted, and had at all relevant times, and has, the corporate power, authority and legal right to acquire, own, and service the Receivables. (b) Due Qualification. The Servicer is duly qualified to do business as a foreign corporation in good standing, and has obtained all necessary licenses and approvals, in all jurisdictions where the failure to do so would materially and adversely affect the Servicer's ability to acquire, own and service the Receivables. (c) Power and Authority. The Servicer has the power and authority to execute and deliver this Agreement and the other Basic Documents to which it is a party and to carry out their respective terms; and the execution, delivery and performance of this Agreement and the other Basic Documents to which it is a party have been duly authorized by the Servicer by all necessary corporate action. (d) Binding Obligation. This Agreement and the other Basic Documents to which it is a party constitute legal, valid and binding obligations of the Servicer, enforceable against the Servicer in accordance with their respective terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors' rights generally and to general principles of equity whether applied in a proceeding in equity or at law. (e) No Violation. The consummation of the transactions contemplated by this Agreement and the other Basic Documents to which it is a party and the fulfillment of their respective terms shall not conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time or both) a default under, the articles of incorporation or bylaws of the Servicer, or any indenture, agreement, mortgage, deed of trust or other instrument to which the Servicer is a party or by which it is bound; or result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement, mortgage, deed of trust or other instrument, other than this Agreement and the other Basic Documents, or violate any law, order, rule or regulation applicable to the Servicer of any court or federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Servicer or any of its properties. (f) No Proceedings. There are no proceedings or investigations pending or, to the Servicer's knowledge, threatened, against the Servicer before any court, regulatory body, administrative agency or other tribunal or governmental instrumentality having jurisdiction over the Servicer or its properties: (i) asserting the invalidity of this Agreement or any of the other Basic Documents; (ii) seeking to prevent the issuance of the Securities or the consummation of any of the transactions contemplated by this Agreement or any of the other Basic Documents; (iii) seeking any determination or ruling that might materially and adversely affect the performance by the Servicer of its obligations under, or the validity or enforceability of, this Agreement or any of the other Basic Documents; or (iv) seeking to adversely affect the federal income tax or other federal, state or local tax attributes of the Securities. 35 (g) No Consents. The Servicer is not required to obtain the consent of any other party or any consent, license, approval or authorization, or registration or declaration with, any governmental authority, bureau or agency in connection with the execution, delivery, performance, validity or enforceability of this Agreement. Section 7.02 Indemnities of Servicer. The Servicer shall be liable in accordance herewith only to the extent of the obligations specifically undertaken by the Servicer and the representations made by the Servicer under this Agreement: (a) The Servicer shall indemnify, defend and hold harmless the Issuer, the Owner Trustee, the Indenture Trustee, the Securityholders and the Depositor and any of the officers, directors, employees and agents of the Issuer, the Owner Trustee and the Indenture Trustee from and against any and all costs, expenses, losses, damages, claims and liabilities arising out of or resulting from the use, ownership or operation by the Servicer or any Affiliate thereof of a Financed Vehicle, excluding any losses incurred in connection with the sale of any repossessed Financed Vehicles in a commercially reasonable manner and in compliance with the terms of this Agreement. (b) The Servicer shall indemnify, defend and hold harmless the Issuer, the Owner Trustee, the Indenture Trustee and the Depositor and their respective officers, directors, agents and employees, and the Securityholders, from and against any taxes that may at any time be asserted against any of such parties with respect to the transactions contemplated in this Agreement, including any sales, gross receipts, tangible or intangible personal property, privilege or license taxes (but not including any federal or other income taxes, including franchise taxes asserted with respect to, and as of the date of, the transfer of the Receivables to the Trust or the issuance and original sale of the Securities), and any costs and expenses in defending against the same. (c) The Servicer shall indemnify, defend and hold harmless the Issuer, the Owner Trustee, the Indenture Trustee, the Depositor, the Securityholders and any of the officers, directors, employees or agents of the Issuer, the Owner Trustee and the Indenture Trustee from and against any and all costs, expenses, losses, claims, damages and liabilities to the extent that such cost, expense, loss, claim, damage or liability arose out of, or was imposed upon any such Person through, the negligence, misfeasance or bad faith of the Servicer in the performance of its duties under this Agreement or by reason of reckless disregard of its obligations and duties under this Agreement. For purposes of this Section, in the event of the termination of the rights and obligations of HMFC (or any successor thereto pursuant to Section 7.03) as Servicer pursuant to Section 8.02, or the resignation by such Servicer pursuant to this Agreement, such Servicer shall be deemed to be the Servicer pending appointment of a successor Servicer (other than the Indenture Trustee) pursuant to Section 8.03. Indemnification under this Section shall survive the resignation or removal of the Servicer or the termination of this Agreement, and shall include reasonable fees and expenses of counsel and reasonable expenses of litigation. If the Servicer shall have made any indemnity payments pursuant to this Section and the Person to or on behalf of whom such payments are 36 made thereafter collects any of such amounts from others, such Person shall promptly repay such amounts to the Servicer, without interest. The Servicer shall pay all amounts due, pursuant to this Section, with respect to the Indenture Trustee and Owner Trustee as set forth in Section 5.05(b)(xi). Section 7.03 Merger or Consolidation of, or Assumption of the Obligations of, Servicer. The Servicer shall not merge or consolidate with any other Person, convey, transfer or lease substantially all its assets as an entirety to another Person, or permit any other Person to become the successor to the Servicer's business unless, after such merger, consolidation, conveyance, transfer, lease or succession, the successor or surviving entity shall be capable of fulfilling the duties of the Servicer contained in this Agreement. Any Person (i) into which the Servicer may be merged or consolidated, (ii) resulting from any merger or consolidation to which the Servicer shall be a party, (iii) that acquires by conveyance, transfer or lease substantially all of the assets of the Servicer or (iv) succeeding to the business of the Servicer, which Person shall execute an agreement of assumption to perform every obligation of the Servicer under this Agreement, shall be the successor to the Servicer under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties to this Agreement. The Servicer shall provide notice of any merger, consolidation or succession pursuant to this Section 7.03(a) to the Owner Trustee, the Indenture Trustee and each Rating Agency. Notwithstanding the foregoing, the Servicer shall not merge or consolidate with any other Person or permit any other Person to become a successor to the Servicer's business unless (i) immediately after giving effect to such transaction, no representation or warranty made pursuant to Section 7.01 shall have been breached (for purposes hereof, such representations and warranties shall speak as of the date of the consummation of such transaction) and no event that, after notice or lapse of time or both, would become a Servicer Termination Event shall have occurred, (ii) the Servicer shall have delivered to the Owner Trustee and the Indenture Trustee an Officer's Certificate and an Opinion of Counsel each stating that such consolidation, merger or succession and such agreement of assumption comply with this Section 7.03(a) and that all conditions precedent provided for in this Agreement relating to such transaction have been complied with and (iii) the Servicer shall have delivered to the Owner Trustee and the Indenture Trustee an Opinion of Counsel stating that either (A) all financing statements and continuation statements and amendments thereto have been executed and filed that are necessary to preserve and protect the interest of the Trust and the Indenture Trustee, respectively, in the assets of the Trust and reciting the details of such filings or (B) no such action shall be necessary to preserve and protect such interest. Section 7.04 Limitation on Liability of Servicer and Others. None of the Servicer or any of its directors, officers, employees or agents shall be under any liability to the Issuer, the Depositor, the Indenture Trustee, the Owner Trustee, the Noteholders or the Certificateholders, except as provided in this Agreement, for any action taken or for refraining from the taking of any action pursuant to this Agreement; provided, however, that this provision shall not protect the Servicer or any such Person against any liability that would otherwise be imposed by reason of a breach of this Agreement or willful misfeasance, bad faith or negligence in the performance of duties. The Servicer and any director, officer, employee or agent of the Servicer may conclusively rely in good faith on the written advice of counsel or on any document of any kind prima facie properly executed and submitted by any Person respecting any matters arising under this Agreement. 37 Section 7.05 Appointment of Subservicer. The Servicer may at any time appoint a subservicer to perform all or any portion of its obligations as Servicer hereunder; provided, however, that 10 days' prior notice of such appointment shall have been given to each Rating Agency, and each Rating Agency shall have notified the Servicer, the Owner Trustee and the Indenture Trustee in writing that such appointment satisfies the Rating Agency Condition; and provided further, that the Servicer shall remain obligated and be liable to the Owner Trustee, the Indenture Trustee and the Securityholders for the servicing and administering of the Receivables in accordance with the provisions hereof without diminution of such obligation and liability by virtue of the appointment of such subservicer and to the same extent and under the same terms and conditions as if the Servicer alone were servicing and administering the Receivables. The fees and expenses of any subservicer shall be as agreed between the Servicer and such subservicer from time to time, and none of the Owner Trustee, the Indenture Trustee, the Issuer or the Securityholders shall have any responsibility therefor. Section 7.06 Servicer Not to Resign. (a) Subject to the provisions of Section 7.03(a), the Servicer shall not resign from the obligations and duties imposed on it by this Agreement as Servicer except upon a determination that the performance of its duties under this Agreement shall no longer be permissible under applicable law. (b) Notice of any determination that the performance by the Servicer of its duties hereunder is no longer permitted under applicable law shall be communicated to the Owner Trustee and the Indenture Trustee at the earliest practicable time (and, if such communication is not in writing, shall be confirmed in writing at the earliest practicable time) and any such determination shall be evidenced by an Opinion of Counsel to such effect delivered by the Servicer to the Owner Trustee and the Indenture Trustee concurrently with or promptly after such notice. No resignation of the Servicer shall become effective until a successor shall have assumed the responsibilities and obligations of the Servicer in accordance with Section 8.03. If no successor Servicer has been appointed within 30 days of resignation or removal, the Servicer, as the case may be, may petition any court of competent jurisdiction for such appointment. ARTICLE VIII. DEFAULT Section 8.01 Servicer Termination Events. For purposes of this Agreement, the occurrence and continuance of any of the following shall constitute a "Servicer Termination Event": (a) Any failure by the Servicer to deposit into any Account any proceeds or payment required to be so delivered or to direct the Indenture Trustee to make the required payment from any Account under the terms of this Agreement that continues unremedied for a period of five Business days after written notice is received by the Servicer or after discovery of such failure by a Responsible Officer of the Servicer; 38 (b) Failure on the part of the Servicer duly to observe or perform, in any material respect, any covenants or agreements of the Servicer set forth in this Agreement, which failure (i) materially and adversely affects the rights of the Securityholders and (ii) continues unremedied for a period of 60 days after discovery of such failure by a Responsible Officer of the Servicer or after the date on which written notice of such failure requiring the same to be remedied shall have been given to the Servicer by any of the Owner Trustee, the Indenture Trustee or Noteholders evidencing not less than 50% of the Outstanding Amounts of the Controlling Class of Notes; or (c) The occurrence of an Insolvency Event with respect to the Servicer. Section 8.02 Consequences of a Servicer Termination Event. If a Servicer Termination Event shall occur, the Indenture Trustee or Noteholders evidencing more than 50% of the voting interests of the Controlling Class may, by notice given in writing to the Servicer (and to the Indenture Trustee, the Owner Trustee and the Depositor if given by such Noteholders), terminate all of the rights and obligations of the Servicer under this Agreement. On or after the receipt by the Servicer of such written notice, all authority, power, obligations and responsibilities of the Servicer under this Agreement automatically shall pass to, be vested in and become obligations and responsibilities of the successor Servicer; provided, however, that the successor Servicer shall have no liability with respect to any obligation that was required to be performed by the terminated Servicer prior to the date that the successor Servicer becomes the Servicer or any claim of a third party based on any alleged action or inaction of the terminated Servicer. The successor Servicer is authorized and empowered by this Agreement to execute and deliver, on behalf of the terminated Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such notice of termination, whether to complete the transfer and endorsement of the Receivables and related documents to show the Indenture Trustee (or the Owner Trustee if the Notes have been paid in full) as lienholder or secured party on the related certificates of title of the Financed Vehicles or otherwise. The terminated Servicer agrees to cooperate with the successor Servicer in effecting the termination of the responsibilities and rights of the terminated Servicer under this Agreement, including the transfer to the successor Servicer for administration by it of all money and property held by the Servicer with respect to the Receivables and other records relating to the Receivables, including any portion of the Receivables File held by the Servicer and a computer tape in readable form as of the most recent Business Day containing all information necessary to enable the successor Servicer to service the Receivables. The terminated Servicer shall also provide the successor Servicer access to Servicer personnel and computer records in order to facilitate the orderly and efficient transfer of servicing duties. Section 8.03 Appointment of Successor Servicer. (a) On and after the time the Servicer receives a notice of termination pursuant to Section 8.02 or upon the resignation of the Servicer pursuant to Section 7.06, the Indenture Trustee or the Noteholders evidencing more than 50% of the voting interests of the Controlling Class shall appoint a successor Servicer which shall be the successor in all respects to the Servicer in its capacity as Servicer under this Agreement and shall be subject to all the rights, responsibilities, restrictions, duties, liabilities and termination provisions relating to the 39 Servicer under this Agreement, except as otherwise stated herein. The Depositor, the Owner Trustee, the Indenture Trustee and such successor Servicer shall take such action, consistent with this Agreement, as shall be necessary to effectuate any such succession. If a successor Servicer is acting as Servicer hereunder, it shall be subject to termination under Section 8.02 upon the occurrence of any Servicer Termination Event after its appointment as successor Servicer. The original Servicer shall pay any and all fees and expenses incurred as a result of a transfer of servicing. (b) The Noteholders evidencing more than 50% of the voting interests of the Controlling Class shall have no liability to the Owner Trustee, the Indenture Trustee, the Servicer, the Depositor, any Noteholders, any Certificateholders or any other Person if it exercises its right to appoint a successor to the Servicer. Pending appointment pursuant to the preceding paragraph, the outgoing Servicer shall continue to act as Servicer until a successor has been appointed and accepted such appointment. (c) Upon appointment, the successor Servicer shall be the successor in all respects to the predecessor Servicer and shall be subject to all the responsibilities, duties and liabilities arising thereafter relating thereto placed on the predecessor Servicer, and shall be entitled to the Servicing Fee and all the rights granted to the predecessor Servicer by the terms and provisions of this Agreement. Section 8.04 Notification to Securityholders. Upon any termination of, or appointment of a successor to, the Servicer pursuant to this Article VIII, the Administrator shall give prompt written notice thereof to the Certificateholders, and the Indenture Trustee shall give prompt written notice thereof to the Noteholders and each Rating Agency. Section 8.05 Waiver of Past Defaults. The Noteholders evidencing more than 50% of the voting interests of the Controlling Class may, on behalf of all Securityholders, waive in writing any default by the Servicer in the performance of its obligations hereunder and its consequences, except a default in making any required deposits to or payments from any of the Trust Accounts in accordance with this Agreement. Upon any such waiver of a past default, such default shall cease to exist, and any Servicer Termination Event arising therefrom shall be deemed to have been remedied for every purpose of this Agreement. No such waiver shall extend to any subsequent or other default or impair any right consequent thereto. ARTICLE IX. TERMINATION Section 9.01 Optional Purchase of All Receivables. (a) On each Determination Date as of which the Pool Balance is equal to or less than 10% of the Initial Pool Balance, the Servicer shall have the option to purchase the Receivables. To exercise such option, the Servicer shall deposit to the Collection Account pursuant to Section 5.04 an amount equal to the aggregate Purchase Amount for the Receivables and shall succeed to all interests in and to the Receivables. The exercise of such option shall effect a retirement, in whole but not in part, of all outstanding Notes. 40 (b) As described in Article IX of the Trust Agreement, notice of any termination of the Trust shall be given by the Servicer to the Owner Trustee and the Indenture Trustee as soon as practicable after the Servicer has received notice thereof. (c) Following the satisfaction and discharge of the Indenture and the payment in full of the principal of and interest on the Notes, the Certificateholders will succeed to the rights of the Noteholders hereunder and the Trust will succeed to the rights of, and assume the obligations to make payments to Certificateholders of, the Indenture Trustee pursuant to this Agreement. ARTICLE X. MISCELLANEOUS Section 10.01 Amendment. (a) This Agreement may be amended by the Depositor, the Servicer, the Indenture Trustee and the Issuer, but without the consent of any of the Noteholders or the Certificateholders, to cure any ambiguity, to correct or supplement any provisions in this Agreement or for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions in this Agreement or of modifying in any manner the rights of the Noteholders or the Certificateholders; provided, however, that such action shall not, as evidenced by an Opinion of Counsel delivered to the Owner Trustee and the Indenture Trustee, adversely affect in any material respect the interests of any Noteholder or Certificateholder. (b) This Agreement may also be amended from time to time by the Depositor, the Servicer and the Issuer, with the prior written consent of the Indenture Trustee and Noteholders holding not less than a majority of the Outstanding Amount of the Notes, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of modifying in any manner the rights of the Securityholders; provided, however, that no such amendment shall (i) increase or reduce in any manner the amount of, or accelerate or delay the timing of, collections of payments on Receivables or distributions that shall be required to be made for the benefit of the Securityholders or (ii) reduce the aforesaid percentage of the Outstanding Amount of the Notes, the Securityholders of which are required to consent to any such amendment, without the consent of the Noteholders holding all Outstanding Notes and Certificateholders holding all outstanding Certificates. Promptly after the execution of any amendment or consent, the Administrator shall furnish written notification of the substance of such amendment or consent to each Securityholder, the Indenture Trustee and each Rating Agency. It shall not be necessary for the consent of Securityholders pursuant to this Section to approve the particular form of any proposed amendment or consent, but it shall be sufficient if such consent shall approve the substance thereof. Prior to the execution of any amendment to this Agreement, the Owner Trustee, on behalf of the Issuer and the Indenture Trustee shall be entitled to receive and rely upon an Opinion of 41 Counsel stating that the execution of such amendment is authorized or permitted by this Agreement and the Opinion of Counsel referred to in Section 10.02(i)(A). The Owner Trustee, on behalf of the Issuer, and the Indenture Trustee may, but shall not be obligated to, enter into any such amendment that affects the Owner Trustee's or the Indenture Trustee's, as applicable, own rights, duties or immunities under this Agreement or otherwise. Section 10.02 Protection of Title to Trust. (a) The Servicer shall file such financing statements and cause to be filed such continuation statements, all in such a manner and in such places as may be required by law fully to preserve, maintain and protect the interest of the Issuer and the Indenture Trustee in the Receivables and the proceeds thereof. The Servicer shall deliver or cause to be delivered to the Owner Trustee and the Indenture Trustee file-stamped copies of, or filing receipts for, any document filed as provided above as soon as available following such filing. (b) Neither the Depositor nor the Servicer shall change its name, identity or corporate structure in any manner that would, could or might make any financing statement or continuation statement filed in accordance with paragraph (a) above insufficient within the meaning of Section 9-503 of the UCC, unless it shall have given the Owner Trustee and the Indenture Trustee at least five days' prior written notice thereof and shall have promptly filed appropriate amendments to all previously filed financing statements or continuation statements. (c) The Servicer shall at all times maintain each office from which it shall service Receivables, and its principal executive office, within the United States of America. (d) The Servicer shall maintain accounts and records as to each Receivable accurately and in sufficient detail to permit (i) the reader thereof to know at any time the status of each such Receivable, including payments and recoveries made and payments owing (and the nature of each) and (ii) reconciliation between payments or recoveries on or with respect to each such Receivable and the amounts from time to time deposited in the Collection Account in respect of each such Receivable. (e) The Servicer shall maintain its computer systems so that, from and after the time of sale under this Agreement of the Receivables, the Servicer's master computer records (including any backup archives) that refer to a Receivable shall indicate clearly the interest of the Issuer in such Receivable and that such Receivable is owned by the Issuer and has been pledged to the Indenture Trustee. Indication of the Issuer's interest in a Receivable shall be deleted from or modified on the Servicer's computer systems when, and only when, the related Receivable shall have been paid in full or repurchased. (f) If at any time the Depositor or the Servicer shall propose to sell, grant a security interest in or otherwise transfer any interest in motor vehicle receivables to any prospective purchaser, lender or other transferee, the Servicer shall give to such prospective purchaser, lender or other transferee computer tapes, records or printouts (including any restored from backup archives) that, if they shall refer in any manner whatsoever to any Receivable, shall indicate clearly that such Receivable has been sold and is owned by the Issuer and has been pledged to the Indenture Trustee. 42 (g) The Servicer shall permit the Indenture Trustee and its agents upon reasonable notice and at any time during normal business hours to inspect, audit and make copies of and abstracts from the Servicer's records regarding any Receivable. (h) Upon request, the Servicer shall furnish to the Owner Trustee or the Indenture Trustee, within fifteen Business Days, a list of all Receivables (by contract number and name of Obligor) then held as part of the Trust, together with a reconciliation of such list to the Schedule of Receivables and to each of the Servicer's Certificates furnished prior to such request indicating removal of Receivables from the Trust. (i) Upon request, the Servicer shall deliver to the Owner Trustee and the Indenture Trustee: (A) promptly after the execution and delivery of this Agreement and each amendment hereto, an Opinion of Counsel stating that, in the opinion of such counsel, either (i) all financing statements and continuation statements have been filed that are necessary to fully preserve and protect the interest of the Trust and the Indenture Trustee in the Receivables, and reciting the details of such filings or referring to prior Opinions of Counsel in which such details are given, or (ii) no such action shall be necessary to preserve and protect such interest; and (B) within 90 days after the beginning of each calendar year beginning with the first calendar year beginning more than three months after the Cutoff Date, an Opinion of Counsel, dated as of a date during such 90-day period, stating that, in the opinion of such counsel, either (i) all financing statements and continuation statements have been filed that are necessary to fully preserve and protect the interest of the Trust and the Indenture Trustee in the Receivables, and reciting the details of such filings or referring to prior Opinions of Counsel in which such details are given, or (ii) no such action shall be necessary to preserve and protect such interest. Each Opinion of Counsel referred to in clause (i) or (ii) above shall specify any action necessary (as of the date of such opinion) to be taken in the following year to preserve and protect such interest. Section 10.03 Notices. All demands, notices, communications and instructions upon or to the Depositor, the Servicer, the Issuer, the Owner Trustee, the Indenture Trustee or any Rating Agency under this Agreement shall be in writing, personally delivered, faxed and followed by first class mail, or mailed by certified mail, return receipt requested, and shall be deemed to have been duly given upon receipt (a) in the case of the Depositor, to 10550 Talbert Avenue, Fountain Valley, California 92708, Attention: Vice President and Secretary, with a copy to General Counsel; (b) in the case of the Servicer and HMFC, to 10550 Talbert Avenue, Fountain Valley, California 92708, Attention: Vice President, Finance; (c) in the case of the Issuer or the Owner Trustee, at the Corporate Trust Office (as defined in the Trust Agreement); (d) in the case of Moody's, to 99 Church Street, New York, New York 10007, Attention: ABS Monitoring Department; (e) in the case of the Indenture Trustee, at the Corporate Trust Office (as defined in 43 the Indenture); (f) in the case of Standard & Poor's, to 55 Water Street (40th Floor), New York, New York 10041, Attention: Asset Backed Surveillance Department; and (g) in the case of Fitch, to One State Street Plaza, New York, New York 10004; or, as to each of the foregoing, at such other address as shall be designated by written notice to the other parties. Section 10.04 Assignment by the Depositor or the Servicer. Notwithstanding anything to the contrary contained herein, except as provided in Sections 6.04 and 7.03 herein and as provided in the provisions of this Agreement concerning the resignation of the Servicer, this Agreement may not be assigned by the Depositor or the Servicer. Section 10.05 Limitations on Rights of Others. The provisions of this Agreement are solely for the benefit of the Depositor, the Servicer, the Issuer, the Owner Trustee, the Certificateholders, the Indenture Trustee and the Noteholders, and nothing in this Agreement, whether express or implied, shall be construed to give to any other Person any legal or equitable right, remedy or claim in the Trust Estate or under or in respect of this Agreement or any covenants, conditions or provisions contained herein. Section 10.06 Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Section 10.07 Counterparts. This Agreement may be executed by the parties hereto in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute but one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by facsimile shall be effective as delivery of a manually executed counterpart of this Agreement. Section 10.08 Headings. The headings of the various Articles and Sections herein are for convenience of reference only and shall not define or limit any of the terms or provisions hereof. Section 10.09 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. Section 10.10 Assignment by Issuer. The Depositor hereby acknowledges and consents to any mortgage, pledge, assignment and grant of a security interest by the Issuer to the Indenture Trustee pursuant to the Indenture for the benefit of the Noteholders of all right, title and interest of the Issuer in, to and under the Receivables or the assignment of any or all of the Issuer's rights and obligations hereunder to the Indenture Trustee. Section 10.11 Nonpetition Covenants. Notwithstanding any prior termination of this Agreement, the parties hereto shall not, prior to the date that is one year and one day after the termination of this Agreement with respect to the Issuer or the Depositor, acquiesce, petition or otherwise invoke or cause the Issuer or the Depositor to invoke the process of any court or 44 government authority for the purpose of commencing or sustaining a case against the Issuer or the Depositor under any federal or state bankruptcy, insolvency or similar law, or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or the Depositor or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Issuer or the Depositor. Section 10.12 Limitation of Liability of Owner Trustee and Indenture Trustee. (a) Notwithstanding anything contained herein to the contrary, this Agreement has been executed by Wilmington Trust Company not in its individual capacity but solely in its capacity as Owner Trustee of the Issuer and in no event shall Wilmington Trust Company in its individual capacity or, except as expressly provided in the Trust Agreement, as Owner Trustee of the Issuer have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer hereunder or in any of the certificates, notices or agreements delivered pursuant hereto, as to all of which recourse shall be had solely to the assets of the Issuer in accordance with the priorities set forth herein. For all purposes of this Agreement, in the performance of its duties or obligations hereunder or in the performance of any duties or obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of Articles VI, VII and VIII of the Trust Agreement. (b) Notwithstanding anything contained herein to the contrary, this Agreement has been accepted by Wells Fargo Bank Minnesota, National Association, not in its individual capacity but solely as Indenture Trustee, and in no event shall Wells Fargo Bank Minnesota, National Association have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer hereunder or in any of the certificates, notices or agreements delivered pursuant hereto, as to all of which recourse shall be had solely to the assets of the Issuer in accordance with the priorities set forth herein. 45 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective officers as of the day and year first above written. HYUNDAI AUTO RECEIVABLES TRUST 2003-A By: WILMINGTON TRUST COMPANY, not in its individual capacity but solely as Owner Trustee By: /s/ W. Chris Sponenberg ------------------------------------ Name: W. Chris Sponenberg Title: Vice President HYUNDAI ABS FUNDING CORPORATION, as Depositor By: /s/ David A. Hoeller ------------------------------------ Name: David A. Hoeller Title: Vice President & Secretary HYUNDAI MOTOR FINANCE COMPANY, as Servicer and Seller By: /s/ David A. Hoeller ------------------------------------ Name: David A. Hoeller Title: Vice President, Finance WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, not in its individual capacity but solely as Indenture Trustee By: /s/ Marianna C. Stershic ------------------------------------ Name: Marianna C. Stershic Title: Vice President EXHIBIT A Representations and Warranties of Hyundai Motor Finance Company Under Section 3.02 of the Receivables Purchase Agreement Terms used in this Exhibit A shall have the meanings assigned to them in the Receivables Purchase Agreement, dated as of November 7, 2003 (the "Receivables Purchase Agreement"), between Hyundai Motor Finance Company as Seller (the "Seller") and Hyundai ABS Funding Corporation as depositor (the "Depositor"). Terms not defined in the Receivables Purchase Agreement shall have the meanings assigned to them in the Sale and Servicing Agreement. (a) The Seller hereby represents and warrants as follows to the Depositor and the Indenture Trustee as of the date hereof and as of the Transfer Date: (i) Organization and Good Standing. The Seller has been duly organized and is validly existing as a corporation in good standing under the laws of the State of California, with the corporate power and authority to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted. (ii) Due Qualification. The Seller is duly qualified to do business as a foreign corporation in good standing, and has obtained all necessary licenses and approvals, in all jurisdictions in which the ownership or lease of property or the conduct of its business shall require such qualifications. (iii) Power and Authority. The Seller has the power and authority to execute and deliver this Agreement and the other Basic Documents to which it is a party and to carry out their respective terms; the Seller had at all relevant times, and has, full power, authority and legal right to sell, transfer and assign the property sold, transferred and assigned to the Depositor hereby and has duly authorized such sale, transfer and assignment to the Depositor by all necessary corporate action; and the execution, delivery and performance of this Agreement and the other Basic Documents to which the Seller is a party have been duly authorized by the Seller by all necessary corporate action. (iv) No Violation. The consummation of the transactions contemplated by this Agreement and the other Basic Documents to which the Seller is a party and the fulfillment of their respective terms do not conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time or both) a default under, the articles of incorporation or bylaws of the Seller, or any indenture, agreement or other instrument to which the Seller is a party or by which it is bound, or result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement or other instrument (other than this Agreement), or violate any law or, to the best of the Seller's knowledge, any order, rule or regulation applicable to the Seller of any court or of A-1 any federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Seller or its properties. (v) No Proceedings. There are no proceedings or investigations pending or, to the Seller's knowledge, threatened against the Seller before any court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Seller or its properties (i) asserting the invalidity of this Agreement or any other Basic Document to which the Seller is a party, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or any other Basic Document to which the Seller is a party or (iii) seeking any determination or ruling that might materially and adversely affect the performance by the Seller of its obligations under, or the validity or enforceability of, this Agreement or any other Basic Document to which the Seller is a party. (vi) Valid Sale, Binding Obligation. This Agreement and the other Basic Documents to which the Seller is a party, when duly executed and delivered by the other parties hereto and thereto, shall constitute legal, valid and binding obligations of the Seller, enforceable against the Seller in accordance with their respective terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization and similar laws now or hereafter in effect relating to or affecting creditors' rights generally and to general principles of equity (whether applied in a proceeding at law or in equity). (vii) Chief Executive Office. The chief executive office of the Seller is located at 10550 Talbert Avenue, Fountain Valley, California 92708. (viii) No Consents. The Seller is not required to obtain the consent of any other party or any consent, license, approval, registration, authorization, or declaration of or with any governmental authority, bureau or agency in connection with the execution, delivery, performance, validity, or enforceability of this Agreement or any other Basic Document to which it is a party that has not already been obtained. (ix) Seller Information. No certificate of an officer, statement or document furnished in writing or report delivered pursuant to the terms hereof by the Seller contains any untrue statement of a material fact or omits to state any material fact necessary to make the certificate, statement, document or report not misleading. (x) Ordinary Course. The transactions contemplated by this Agreement and the other Basic Documents to which the Seller is a party are in the ordinary course of the Seller's business. (xi) Solvency. The Seller is not insolvent, nor will the Seller be made insolvent by the transfer of the Receivables, nor does the Seller contemplate any pending insolvency. (xii) Legal Compliance. The Seller is not in violation of, and the execution and delivery of this Agreement and the other Basic Documents to which the Seller is a party by it and its performance and compliance with the terms of this Agreement and the other Basic Documents to which the Seller is a party will not constitute a violation with respect to, any order or decree of any court or any order or regulation of any federal, state, municipal or A-2 governmental agency having jurisdiction, which violation would materially and adversely affect the Seller's condition (financial or otherwise) or operations or any of the Seller's properties or materially and adversely affect the performance of any of its duties under the Basic Documents. (xiii) Creditors. The Seller represents and warrants that it did not sell the Receivables to the Depositor with any intent to hinder, delay or defraud any of its creditors. (xiv) No Notice. The Seller represents and warrants that it acquired title to the Receivables in good faith, without notice of any adverse claim. (xv) Bulk Transfer. The Seller represents and warrants that the transfer, assignment and conveyance of the Receivables by the Seller pursuant to this Agreement are not subject to the bulk transfer laws or any similar statutory provisions in effect in any applicable jurisdiction. (b) The Seller makes the following representations and warranties with respect to the Receivables, on which the Depositor relies in accepting the Receivables and in transferring the Receivables to the Issuer under the Sale and Servicing Agreement, and on which the Issuer relies in pledging the same to the Indenture Trustee. Such representations and warranties speak as of the execution and delivery of this Agreement as of the Closing Date, but shall survive the sale, transfer and assignment of the Receivables to the Depositor, the subsequent sale, transfer and assignment of the Receivables by the Depositor to the Issuer pursuant to the Sale and Servicing Agreement and the pledge of the Receivables by the Issuer to the Indenture Trustee pursuant to the Indenture. (i) Characteristics of Receivables. Each Receivable (A) was originated in the United States of America by a Dealer located in the United States of America for the retail sale of a Financed Vehicle in the ordinary course of such Dealer's business in accordance with the Seller's Credit and Collection Policy as of the date of origination of the related Receivable, is payable in United States dollars, has been fully and properly executed by the parties thereto, has been purchased by the Seller from such Dealer under an existing Dealer Agreement and has been validly assigned by such Dealer to the Seller, (B) has created or shall create a valid, subsisting and enforceable first priority security interest in favor of the Seller in the Financed Vehicle, which security interest is assignable by the Seller to the Depositor, and by the Depositor to the Issuer, (C) contains customary and enforceable provisions such that the rights and remedies of the holder thereof are adequate for realization against the collateral of the benefits of the security, (D) provides for fixed level monthly payments (provided that the payment in the last month of the term of the Receivable may be insignificantly different from the level payments) that fully amortize the Amount Financed by maturity and yield interest at the APR and (E) amortizes using the simple interest method. (ii) Compliance with Law. Each Receivable and the sale of the related Financed Vehicle complied at the time it was originated or made, and at the time of execution of this Agreement complies, in all material respects with all requirements of applicable federal, state and local laws, rulings and regulations thereunder, including usury laws, the Federal Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit Billing Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the Federal Trade Commission Act, the A-3 Magnuson-Moss Warranty Act, the Federal Reserve Board's Regulations "B" and "Z", the Soldiers' and Sailors' Civil Relief Act of 1940, the Gramm Leach Bliley Act, the Texas Consumer Credit Code and state adaptations of the National Consumer Act and of the Uniform Consumer Credit Code, and other consumer credit laws and equal credit opportunity and disclosure laws; and each Dealer has represented to the Seller that such Dealer had all necessary licenses and permits to originate such Receivables. (iii) Binding Obligation. Each Receivable represents the genuine, legal, valid and binding payment obligation of the Obligor thereon, enforceable by the holder thereof in accordance with its terms, except (A) as enforceability thereof may be limited by bankruptcy, insolvency, reorganization or similar laws affecting the enforcement of creditors' rights generally and by equitable limitations on the availability of specific remedies, regardless of whether such enforceability is considered in a proceeding in equity or at law and (B) as such Receivable may be modified by the application after the Transfer Date of the Soldiers' and Sailors' Civil Relief Act of 1940, as amended. (iv) No Government Obligor. No Receivable is due from the United States of America or any State or any agency, department, subdivision or instrumentality thereof. (v) Obligor Bankruptcy. At the Cutoff Date, no Obligor is or has been, since the origination of the related Receivable, the subject of a bankruptcy proceeding. (vi) Schedule of Receivables. The information set forth in Schedule A to this Agreement is true and correct in all material respects as of the close of business on the Cutoff Date. (vii) Marking Records. By the Transfer Date, the Seller will have caused its computer and accounting records relating to each Receivable to be clearly and unambiguously marked to show that the Receivables have been sold to the Depositor by the Seller and transferred and assigned by the Depositor to the Issuer in accordance with the terms of the Sale and Servicing Agreement and pledged by the Issuer to the Indenture Trustee in accordance with the terms of the Indenture. (viii) Computer Tape. The computer tape regarding the Receivables made available by the Seller to the Depositor is complete and accurate in all respects as of the Transfer Date. (ix) No Adverse Selection. No selection procedures believed by the Seller to be adverse to the Noteholders or the Certificateholder were utilized in selecting the Receivables. (x) Chattel Paper. Each Receivable constitutes chattel paper within the meaning of the UCC as in effect in the state of origination. (xi) One Original. There is only one original executed copy of each Receivable. A-4 (xii) Receivables in Force. No Receivable has been satisfied, subordinated or rescinded, nor has any Financed Vehicle been released from the Lien of the related Receivable in whole or in part. None of the terms of any Receivable has been waived, altered or modified in any respect since its origination, except by instruments or documents identified in the related Receivable File. No Receivable has been modified as a result of the application of the Soldiers' and Sailors' Civil Relief Act of 1940, as amended. (xiii) Lawful Assignment. No Receivable has been originated in, or is subject to the laws of, any jurisdiction the laws of which would make unlawful, void or voidable the sale, transfer and assignment of such Receivable under this Agreement, the Sale and Servicing Agreement or the pledge of such Receivable under the Indenture. (xiv) Title. It is the intention of the Seller that the transfers and assignments herein contemplated constitute sales of the Receivables from the Seller to the Depositor and that the beneficial interest in and title to the Receivables not be part of the debtor's estate in the event of the filing of a bankruptcy petition by or against the Seller under any bankruptcy law. No Receivable, other than the Receivables identified in the Reconveyance Documents, has been sold, transferred, assigned or pledged by the Seller to any Person other than to the Depositor or pursuant to this Agreement (or by the Depositor to any other Person other than to the Issuer pursuant to the Sale and Servicing Agreement). Except with respect to the Liens under the Conduit Documents (which such Liens shall be released in accordance with provisions of the Reconveyance Documents), immediately prior to the transfers and assignments herein contemplated, the Seller has good and marketable title to each Receivable free and clear of all Liens, and, immediately upon the transfer thereof, the Depositor shall have good and marketable title to each Receivable, free and clear of all Liens and, immediately upon the transfer thereof from the Depositor to the Issuer pursuant to the Sale and Servicing Agreement, the Issuer shall have good and marketable title to each Receivable, free and clear of all Liens and, immediately upon the pledge thereof from the Issuer to the Indenture Trustee pursuant to the Indenture, the Indenture Trustee shall have a first priority perfected security interest in each Receivable. (xv) Security Interest in Financed Vehicle. Immediately prior to its sale, assignment and transfer to the Depositor pursuant to this Agreement, each Receivable shall be secured by a validly perfected first priority security interest in the related Financed Vehicle in favor of the Seller as secured party, or all necessary and appropriate actions have been commenced that will result in the valid perfection of a first priority security interest in such Financed Vehicle in favor of the Seller as secured party. The Lien Certificate for each Financed Vehicle shows, or if a new or replacement Lien Certificate is being applied for with respect to such Financed Vehicle such Lien Certificate shall be received within 120 days of the Closing Date and shall show, the Seller named as the original secured party under each Receivable as the holder of a first priority security interest in such Financed Vehicle. With respect to each Receivable for which the Lien Certificate has not yet been returned from the Registrar of Titles, the Seller has received written evidence that such Lien Certificate showing the Seller as first lienholder has been applied for. Each Dealer's security interest in any Receivable originated by such Dealer has been validly assigned by the Dealer to the Seller. The Seller's security interest has been validly assigned to the Depositor pursuant to this Agreement. The Seller has the legal right to repossess or recover by legal process the Financed Vehicle in its name. A-5 (xvi) All Filings Made. All filings (including UCC filings, except for UCC releases required to be filed in accordance with the Reconveyance Documents) required to be made in any jurisdiction to give the Issuer a first perfected ownership interest in the Receivables and the Indenture Trustee a first priority perfected security interest in the Receivables have been made. (xvii) No Defenses. No Receivable is subject to any right of rescission, setoff, counterclaim, dispute or defense, including the defense of usury, whether arising out of transactions concerning the Receivable or otherwise, and the operation of any terms of the Receivable or the exercise by the Seller or the Obligor of any right under the Receivable will not render the Receivable unenforceable in whole or in part, and no such right of rescission, setoff, counterclaim, dispute or defense, including the defense of usury, has been asserted with respect thereto. (xviii) No Default. There has been no default, breach, violation or event permitting acceleration under the terms of any Receivable (other than payment delinquencies of not more than 30 days), and no condition exists or event has occurred and is continuing that with notice, the lapse of time or both would constitute a default, breach, violation or event permitting acceleration under the terms of any Receivable, and there has been no waiver of any of the foregoing. (xix) Insurance. The Seller, in accordance with its customary procedures, has determined that the Obligor has obtained physical damage insurance covering each Financed Vehicle and, under the terms of the related Receivable, the Obligor is required to maintain such insurance and to name the Seller as a loss payee. (xx) Final Scheduled Maturity Date. No Receivable has a final scheduled payment date after October 11, 2009. (xxi) Certain Characteristics of the Receivables. As of the applicable Cutoff Date, (A) each Receivable had an original maturity of not less than 12 or more than 72 months and (B) no Receivable was more than 5 days past due as of the Cutoff Date. (xxii) No Foreign Obligor. All of the Receivables are due from Obligors who are citizens, or legal resident aliens, of the United States of America. (xxiii) No Extensions. The number or timing of scheduled payments has not been changed on any Receivable on or before the Closing Date, as applicable, except as reflected on the computer tape delivered in connection with the sale of the Receivables. (xxiv) Scheduled Payments. Each Obligor has been instructed to make all scheduled payments to the Post Office Boxes. To the best knowledge of the Seller, each Obligor has paid the entire down payment called for by the contract. (xxv) Dealer Agreements. The representations and warranties of the Dealer in the Dealer Agreement with respect to each Receivable purchased by the Seller pursuant to such Dealer Agreement were true and correct in all material respects as of the date the Seller acquired such Receivable from that Dealer. A-6 (xxvi) No Fleet Sales. No Receivable has been included in a "fleet" sale (i.e., a sale to any single Obligor of more than five Financed Vehicles). (xxvii) Receivable Files Complete. There exists a Receivable File pertaining to each Receivable and such Receivable File contains, without limitation, (A) a fully executed original of the Receivable, (B) a certificate of insurance, application form for insurance signed by the Obligor, or a signed representation letter from the Obligor named in the Receivable pursuant to which the Obligor has agreed to obtain physical damage insurance for the related Financed Vehicle, (C) the original Lien Certificate or application therefor together with an assignment of the Lien Certificate executed by such Dealer to the Seller, (D) an original credit application signed by the Obligor and (E) the other documents that are set forth on Schedule II hereto. Each of such documents which is required to be signed by the Obligor has been signed by the Obligor in the appropriate spaces. All blanks on any form described in clauses (A), (B), (C), (D) and (E) above have been properly filled in and each form has otherwise been correctly prepared. Notwithstanding the above, the complete Receivable File for each Receivable, (x) shall fulfill the documentation requirements of the Seller's Credit and Collection Policy as in effect on the date of origination of such Receivable and (y) is in possession of the Servicer on the Transfer Date. The blanket power of attorney granted to the Indenture Trustee and the original Lien Certificate are the only documents necessary to permit the Indenture Trustee to submit the Lien Certificate for each Financed Vehicle for retitling in the name of the Indenture Trustee as secured party in the event such retitling were required or otherwise permitted under the Basic Documents. (xxviii) No Fraud or Misrepresentation. Each Receivable was originated by a Dealer and was sold by the Dealer to the Seller, to the best of the Seller's knowledge, without fraud or misrepresentation on the part of such Dealer in either case. (xxix) Receivables Not Assumable. No Receivable is assumable by another person in a manner which would release the Obligor thereof from such Obligor's obligations to the Seller with respect to such Receivable. (xxx) No Impairment. The Seller has not done anything to convey any right to any person that would result in such person having a right to payments due under a Receivable or otherwise to impair the rights of the Depositor in any Receivable or the proceeds thereof. (xxxi) Tax Liens. There is no Lien against any Financed Vehicle for delinquent taxes. (xxxii) No Corporate Obligor. All of the Receivables are due from Obligors who are natural persons. (xxxiii) No Liens. No Liens or claims have been filed for work, labor, or materials relating to a Financed Vehicle that are prior to, or equal or coordinate with, the security interest in the Financed Vehicle granted by the related Receivable. A-7 (xxxiv) Servicing. Each Receivable has been serviced in conformity with all applicable laws, rules and regulation and in conformity with the Seller's policies and procedures which are consistent with customary, prudent industry standards. (xxxv) APR. No Receivable has an APR of less than 0.00% and the weighted average coupon on the pool of Receivables is at least 7.296%. (xxxvi) Remaining Term. Each Receivable has a remaining term of at least 3 months and no more than 72 months. (xxxvii) Original Term. The weighted average original term for the Receivables is at least 62.3 months. (xxxviii) Remaining Balance. Each Receivable has a remaining balance of at least $2,013.03 and not greater than $38,824.90. (xxxix) New Vehicles. At least 95.36% of the aggregate principal balance of the Receivables is secured by Financed Vehicles which were new at the date of origination. (xl) No Advances. No advances have been made to Obligors in order to meet any representation and warranties herein set forth. (xli) No Repossessions. No Financed Vehicle has been repossessed on or prior to the applicable Transfer Date. (xlii) No Omissions. There have been no material omissions or misstatements in any document provided or statement made to the Depositor concerning the Receivables by or on behalf of the Seller in connection with the transactions contemplated by this Agreement. (xliii) No Proceedings Pending. As of the Cutoff Date, there are no proceedings pending, or to the best of the Seller's knowledge, threatened, wherein the Obligor or any governmental agency has alleged that any Receivable is illegal or unenforceable. (xliv) Dealer Agreements. Each Dealer from whom the Seller purchases Receivables has entered into a Dealer Agreement with the Seller providing for the sale of Receivables from time to time by such Dealer to the Seller. (xlv) Receivable Obligations. The Seller has duly fulfilled all obligations to be fulfilled on its part under or in connection with the origination, acquisition and assignment of the Receivables. To the best of the Seller's knowledge, no notice to or consent from any Obligor is necessary to effect the acquisition of the Receivables by the Indenture Trustee. (xlvi) Taxes. The sale, transfer, assignment and conveyance of the Receivables by the Seller pursuant to this Agreement is not subject to and will not result in any tax, fee or governmental charge payable by the Seller, the Issuer or the Indenture Trustee to any federal, state or local government ("Transfer Taxes") other than Transfer Taxes which have or A-8 will be paid by the Seller as due. In the event the Issuer or the Indenture Trustee receives actual notice of any Transfer Taxes arising out of the transfer, assignment and conveyance of the Receivables, on written demand by the Issuer or the Indenture Trustee, or upon the Seller's otherwise being given notice thereof by the Issuer or the Indenture Trustee, the Seller shall pay, and otherwise indemnify and hold the Issuer and the Indenture Trustee harmless, on an after-tax basis, from and against any and all such Transfer Taxes (it being understood that the Noteholders, the Indenture Trustee and the Issuer shall have no obligation to pay such Transfer Taxes). (xlvii) Computer Tape. The computer tape from which the selection of the Receivables being acquired on the Closing Date was made available to the accountants that are providing a comfort letter to the Noteholders in connection with the numerical information regarding the Receivables and the Notes. (xlviii) No Future Disbursement. At the time each Receivable was acquired from the Dealer, the Amount Financed was fully disbursed. There is no requirement for future advances of principal thereunder, and, other than in connection with Dealer participations, all fees and expenses in connection with the origination of such Receivable have been paid. (xlix) Physical Damage Insurance Policy. In connection with the purchase of each Receivable, the Seller required the related Dealer to furnish evidence that the related Financed Vehicle was covered by a physical damage insurance policy (i) in an amount at least equal to the lesser of (a) the actual cash value of the related Financed Vehicle or (b) the unpaid principal balance owing on such Receivable, (ii) naming the Seller as a loss payee and (iii) insuring against loss and damage due to fire, theft, transportation, collision and other risks generally covered by comprehensive and collision coverage. (l) Dealer Agreement. The Dealer that sold each Receivable to the Seller has entered into the Dealer Agreement and such Dealer Agreement, together with the assignment and related documentation signed by the Dealer, constitutes the entire agreement between the Seller and the related Dealer with respect to the sale of such Receivable to the Seller. Each such Dealer Agreement is in full force and effect and is the legal, valid and binding obligation of such Dealer, there have been no material defaults by such Dealer or by the Seller under such Dealer Agreement; the Seller has fully performed all of its obligations under such Dealer Agreement; the Seller has not made any statements or representations to such Dealer (whether written or oral) inconsistent with any term of such Dealer Agreement; the Purchase Price (as specified in the applicable Dealer Agreement) for such Receivable has been paid in full by the Seller, there is no other payment of principal due to such Dealer from the Seller for the purchase of such Receivable; such Dealer has no right, title or interest in or to any Receivable; there is no prior course of dealing between such Dealer and the Seller which will materially and adversely affect the terms of such Dealer Agreement; and any payment owed to such Dealer by the Seller is a corporate obligation of the Seller. (li) Condition of Financed Vehicle. Each Receivable requires the Obligor to maintain the related Financed Vehicle in good and workable order. A-9 (lii) Condition of Financed Vehicle as of Transfer Date. To the best of the Seller's knowledge, each Financed Vehicle was properly delivered to the related Obligor in good repair, without defects and in satisfactory order, and each Financed Vehicle is in good operating condition and repair as of the Transfer Date. (liii) Business of Obligor. To the best of the Seller's knowledge, no Obligor is a Person involved in the business of leasing or selling equipment of a type similar to the Financed Vehicles. (liv) No Consumer Leases. No Receivable constitutes a "consumer lease" under either (a) the UCC as in effect in the jurisdiction whose law governs the Receivable or (b) the Consumer Leasing Act, 15 USC 1667. (lv) Balance as of Cutoff Date. The aggregate principal balance of the Receivables as of the Cutoff Date is equal to $815,463,348.54. (lvi) Prepayment or Termination. No Receivable permits early termination or prepayment unless the amount to be paid by or on behalf of the Obligor in respect of such prepayment or termination is at all times equal to or in excess of what the related Purchase Amount would be. A-10 EXHIBIT B Form of Record Date Statement [To be provided by HMFC] B-1 EXHIBIT C Form of Servicer's Certificate [To be provided by HMFC] C-1 EXHIBIT D Extension Policy [To be provided by HMFC] D-1 SCHEDULE A Schedule of Receivables [To be Delivered to the Trust at Closing] Sched. A-1 SCHEDULE B Required Yield Supplement Overcollateralization Amount With respect to any Payment Date, the "Yield Supplement Overcollateralization Amount" is the amount specified below:
Yield Supplement Overcollateralization Payment Date Amount - -------------- --------------------- Closing Date $34,793,005.31 December 2003 $32,224,734.06 January 2004 $30,976,696.34 February 2004 $29,752,912.74 March 2004 $28,553,525.87 April 2004 $27,378,679.18 May 2004 $26,228,513.33 June 2004 $25,103,173.36 July 2004 $24,002,803.55 August 2004 $22,927,547.39 September 2004 $21,877,542.29 October 2004 $20,852,893.53 November 2004 $19,853,721.28 December 2004 $18,880,136.42 January 2005 $17,932,261.24 February 2005 $17,010,216.42 March 2005 $16,114,116.40 April 2005 $15,244,069.49 May 2005 $14,400,188.13 June 2005 $13,582,574.02 July 2005 $12,791,346.72 August 2005 $12,026,616.70 September 2005 $11,288,439.85 October 2005 $10,576,285.46 November 2005 $ 9,889,583.69 December 2005 $ 9,228,123.15 January 2006 $ 8,591,971.21 February 2006 $ 7,981,209.99 March 2006 $ 7,395,894.02 April 2006 $ 6,836,094.03 May 2006 $ 6,301,596.65 June 2006 $ 5,792,064.85 July 2006 $ 5,307,110.80 August 2006 $ 4,845,952.25 September 2006 $ 4,407,562.96
Sched. B-1
Yield Supplement Overcollateralization Payment Date Amount - -------------- --------------------- October 2006 $3,990,809.85 November 2006 $3,595,134.25 December 2006 $3,220,297.65 January 2007 $2,866,389.87 February 2007 $2,533,515.53 March 2007 $2,221,775.10 April 2007 $1,931,268.98 May 2007 $1,662,019.82 June 2007 $1,413,867.80 July 2007 $1,186,559.66 August 2007 $ 980,005.98 September 2007 $ 794,140.65 October 2007 $ 628,657.95 November 2007 $ 483,277.42 December 2007 $ 357,834.70 January 2008 $ 252,337.52 February 2008 $ 166,812.04 March 2008 $ 101,238.38 April 2008 $ 55,530.26 May 2008 $ 29,206.98 June 2008 $ 17,161.20 July 2008 $ 11,032.51 August 2008 $ 7,006.40 September 2008 $ 4,408.97 October 2008 $ 2,899.93 November 2008 $ 2,026.47 December 2008 $ 1,359.05 January 2009 $ 867.80 February 2009 $ 527.09 March 2009 $ 310.54 April 2009 $ 183.39 May 2009 $ 112.95 June 2009 $ 63.75 July 2009 $ 30.94 August 2009 $ 12.19 September 2009 $ 3.69 October 2009 $ 0.00
Sched. B-2 EX-10 8 ex10-2.txt EXHIBIT 10.2 Exhibit 10.2 EXECUTION COPY - -------------------------------------------------------------------------------- RECEIVABLES PURCHASE AGREEMENT between HYUNDAI MOTOR FINANCE COMPANY, as Seller, and HYUNDAI ABS FUNDING CORPORATION, as Depositor Dated as of November 7, 2003 - -------------------------------------------------------------------------------- TABLE OF CONTENTS ARTICLE I Certain Definitions ARTICLE II Conveyance of Receivables Section 2.01. Conveyance of Receivables......................................2 Section 2.02. The Closing....................................................4 ARTICLE III Representations and Warranties Section 3.01. Representations and Warranties of Depositor....................4 Section 3.02. Representations and Warranties of Seller.......................5 ARTICLE IV Conditions Section 4.01. Conditions to Obligation of the Depositor.....................14 Section 4.02. Conditions to Obligation of the Seller........................15 ARTICLE V Covenants of the Seller Section 5.01. Protection of Right, Title and Interest.......................15 Section 5.02. Other Liens or Interests......................................16 Section 5.03. Costs and Expenses............................................16 Section 5.04. Hold Harmless.................................................16 ARTICLE VI Indemnification Section 6.01. Indemnification...............................................16 ARTICLE VII Miscellaneous Provisions Section 7.01. Obligations of Seller.........................................17 Section 7.02. Repurchase Events.............................................17 Section 7.03. Depositor Assignment of Repurchased Receivables...............17 Section 7.04. Transfer to the Issuer........................................17 Section 7.05. Amendment.....................................................17
Section 7.06. Waivers.......................................................18 Section 7.07. Notices.......................................................18 Section 7.08. Costs and Expenses............................................18 Section 7.09. Representations of the Seller and the Depositor...............18 Section 7.10. Confidential Information......................................19 Section 7.11. Headings and Cross-References.................................19 Section 7.12. GOVERNING LAW.................................................19 Section 7.13. Counterparts..................................................19 Section 7.14. Third Party Beneficiary.......................................19 Section 7.15. No Proceedings................................................19 Section 7.16. Nonpetition Covenant..........................................19 EXHIBIT A Subordinated Promissory Note.............................. A-1 SCHEDULE I Schedule of Receivables................................... I-1 SCHEDULE II Receivable File Schedule.................................. II-1 SCHEDULE III Reconveyance Documents.................................... III-1 SCHEDULE IV Conduit Documents......................................... IV-1
ii RECEIVABLES PURCHASE AGREEMENT dated as of November 7, 2003 between HYUNDAI MOTOR FINANCE COMPANY, a California corporation, as seller (the "Seller"), and HYUNDAI ABS FUNDING CORPORATION, a Delaware corporation, as depositor (the "Depositor"). RECITALS WHEREAS, in the regular course of its business, the Seller has purchased certain motor vehicle retail installment sale contracts secured by new and used automobiles, light-duty trucks, vans and minivans from motor vehicle dealers; WHEREAS, the Seller and the Depositor wish to set forth the terms pursuant to which such contracts are to be sold by the Seller to the Depositor; and WHEREAS, the Depositor intends, concurrently with its purchases from time to time hereunder, to convey all of its right, title and interest in and to $815,463,348.54 of such contracts to Hyundai Auto Receivables Trust 2003-A (the "Issuer") pursuant to a Sale and Servicing Agreement dated as of November 7, 2003 (the "Sale and Servicing Agreement"), by and among the Issuer, the Depositor, the Seller, Hyundai Motor Finance Company, as Servicer and Wells Fargo Bank Minnesota, National Association, as Indenture Trustee, and the Issuer intends to pledge all of its right, title and interest in such contracts to the Indenture Trustee pursuant to the Indenture. NOW, THEREFORE, in consideration of the foregoing, other good and valuable consideration and the mutual terms and covenants contained herein, the parties hereto agree as follows: ARTICLE I Certain Definitions Terms not defined in this Agreement shall have the meanings assigned thereto in the Sale and Servicing Agreement or the Indenture. As used in this Agreement, the following terms shall, unless the context otherwise requires, have the following meanings (such meanings to be equally applicable to the singular and plural forms of the terms defined): "Agreement" shall mean this Receivables Purchase Agreement, as the same may be amended and supplemented from time to time. "Closing Date" shall mean November 7, 2003. "Conduit Documents" shall mean the documents listed on Schedule IV hereto. "Depositor" shall mean Hyundai ABS Funding Corporation, a Delaware corporation, its successors and assigns. "Indemnified Losses" shall have the meaning specified in Section 6.01. "Indemnified Party" shall have the meaning specified in Section 6.01. "Lien Certificate" means with respect to a Financed Vehicle, an original certificate of title, certificate of lien or other notification issued by the Registrar of Titles of the applicable state to a secured party which indicates that the lien of the secured party on the Financed Vehicle is recorded on the original certificate of title. In any jurisdiction in which the original certificate of title is required to be given to the Obligor, the term "Lien Certificate" shall mean only a certificate or notification issued to a secured party. "Purchase Price" means, with respect to any Receivable, an amount equal to the Principal Balance of such Receivable as of the Cutoff Date. "Receivable" shall mean any Contract listed on Schedule I hereto (which Schedule may be in the form of microfiche). "Reconveyance Documents" shall mean the documents listed on Schedule III hereto. "Registrar of Titles" means with respect to any state, the governmental agency or body responsible for the registration of, and the issuance of certificates of title relating to, motor vehicles and liens thereon. "Repurchase Event" shall have the meaning specified in Section 7.02. "Sale and Servicing Agreement" shall have the meaning set forth in the recitals. "Schedule of Receivables" shall mean the list of Receivables annexed hereto as Schedule I. "Seller" shall mean Hyundai Motor Finance Company, a California corporation, its successors and assigns. "Subordinated Promissory Note" shall have the meaning specified in Section 2.01(a). "Transfer Date" shall mean the Closing Date. "Transfer Tax" shall have the meaning specified in Section 3.02(b)(xlvii). "Underwriting Agreement" means the Underwriting Agreement dated October 29, 2003, relating to Hyundai Auto Receivables Trust 2003-A among the Depositor, HMFC and Banc One Capital Markets, Inc., on behalf of itself and as Representative of the Several Underwriters. ARTICLE II Conveyance of Receivables Section 2.01. Conveyance of Receivables. 2 (a) In consideration of the Depositor's delivery to or upon the order of the Seller on the Closing Date of $746,005,376.15 and a subordinated revolving credit note of the Depositor in the form of Exhibit A attached hereto (the "Subordinated Promissory Note") in a principal amount equal to $69,457,972.39, the Seller does hereby sell, transfer, assign, set over and otherwise convey to the Depositor, without recourse (subject to the obligations of the Seller herein) all right, title, and interest of the Seller in and to: (i) the Receivables and all moneys received thereon on or after the Cutoff Date; (ii) the security interests in the Financed Vehicles and any accessions thereto granted by Obligors pursuant to the Receivables and any other interest of the Seller in such Financed Vehicles; (iii) any Liquidation Proceeds and any other proceeds with respect to the Receivables from claims on any physical damage, credit life or disability insurance policies covering Financed Vehicles or Obligors, including any vendor's single interest or other collateral protection insurance policy; (iv) any property that shall have secured any Receivable and that shall have been acquired by or on behalf of the Seller; (v) all documents and other items contained in the Receivable Files; (vi) all proceeds from any Receivable repurchased by a Dealer pursuant to a Dealer Agreement; and (vii) the proceeds of any and all of the foregoing. The Depositor shall make payment in respect of the Purchase Price upon demand by the Seller. (b) The outstanding principal amount of the Subordinated Promissory Note shall bear interest at a rate per annum equal to the prime rate as published on such day (or, if not then published, on the most recently preceding day) in The Wall Street Journal as the "Prime Rate." Changes in the rate payable hereunder shall be effective on each day on which a change in the Prime Rate is published. On each Payment Date, the Depositor shall repay the accrued interest on, and principal amount of, the Subordinated Promissory Note as and to the extent of any amounts received by the Depositor from proceeds of collections of Receivables, subject, however, to the prior right of the Issuer to receive payments out of the collections pursuant to this Agreement. (c) [Reserved] (d) The Seller and the Depositor intend that the transfer of assets by the Seller to the Depositor pursuant to this Agreement be a sale of the ownership interest in such assets to the Depositor, rather than the mere granting of a security interest to secure a borrowing. In the 3 event, however, that such transfer is deemed not to be a sale but to be of a mere security interest to secure a borrowing or such transfer is otherwise not effective to sell the Receivables and other property described in Section 2.01(a) hereof, the Seller shall be deemed to have hereby granted to the Depositor a perfected first priority security interest in all such assets, and this Agreement shall constitute a security agreement under applicable law. Pursuant to the Sale and Servicing Agreement and Section 7.04 hereof, the Depositor may sell, transfer and assign to the Issuer (i) all or any portion of the assets assigned to the Depositor hereunder, (ii) all or any portion of the Depositor's rights against the Seller under this Agreement and (iii) all proceeds thereof. Such assignment may be made by the Depositor with or without an assignment by the Depositor of its rights under this Agreement, and without further notice to or acknowledgement from the Seller. The Seller waives, to the extent permitted under applicable law, all claims, causes of action and remedies, whether legal or equitable (including any right of setoff), against the Depositor or any assignee of the Depositor relating to such action by the Depositor in connection with the transactions contemplated by the Sale and Servicing Agreement. Section 2.02. The Closing. The sale and purchase of the Receivables shall take place at a closing at the offices of Latham & Watkins LLP, 885 Third Avenue, Suite 1000, New York, New York 10022, on the Closing Date, simultaneously with the closing under (a) the Sale and Servicing Agreement, (b) the Indenture and (c) the Trust Agreement. ARTICLE III Representations and Warranties Section 3.01. Representations and Warranties of Depositor. The Depositor hereby represents and warrants as follows to the Seller and the Indenture Trustee as of the date hereof and the Transfer Date: (a) Organization and Good Standing. The Depositor has been duly organized and is validly existing as a corporation in good standing under the laws of the State of Delaware, with the corporate power and authority to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted, including the corporate power, authority and legal right to acquire and sell the Receivables. (b) Power and Authority. The Depositor has the power and authority to execute and deliver this Agreement and to carry out its terms; and the execution, delivery and performance of this Agreement have been duly authorized by the Depositor by all necessary corporate action. (c) No Violation. The consummation of the transactions contemplated by this Agreement and the fulfillment of the terms hereof do not conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time or both) a default under, the charter or bylaws of the Depositor, or any indenture, agreement or other instrument to which the Depositor is a party or by which it is bound. 4 Section 3.02. Representations and Warranties of Seller. (a) The Seller hereby represents and warrants as follows to the Depositor and the Indenture Trustee as of the date hereof and as of the Transfer Date: (i) Organization and Good Standing. The Seller has been duly organized and is validly existing as a corporation in good standing under the laws of the State of California, with the corporate power and authority to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted. (ii) Due Qualification. The Seller is duly qualified to do business as a foreign corporation in good standing, and has obtained all necessary licenses and approvals, in all jurisdictions in which the ownership or lease of property or the conduct of its business shall require such qualifications. (iii) Power and Authority. The Seller has the power and authority to execute and deliver this Agreement and the other Basic Documents to which it is a party and to carry out their respective terms; the Seller had at all relevant times, and has, full power, authority and legal right to sell, transfer and assign the property sold, transferred and assigned to the Depositor hereby and has duly authorized such sale, transfer and assignment to the Depositor by all necessary corporate action; and the execution, delivery and performance of this Agreement and the other Basic Documents to which the Seller is a party have been duly authorized by the Seller by all necessary corporate action. (iv) No Violation. The consummation of the transactions contemplated by this Agreement and the other Basic Documents to which the Seller is a party and the fulfillment of their respective terms do not conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time or both) a default under, the articles of incorporation or bylaws of the Seller, or any indenture, agreement or other instrument to which the Seller is a party or by which it is bound, or result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement or other instrument (other than this Agreement), or violate any law or, to the best of the Seller's knowledge, any order, rule or regulation applicable to the Seller of any court or of any federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Seller or its properties. (v) No Proceedings. There are no proceedings or investigations pending or, to the Seller's knowledge, threatened against the Seller before any court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Seller or its properties (i) asserting the invalidity of this Agreement or any other Basic Document to which the Seller is a party, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or any other Basic Document to which the Seller is a party or (iii) seeking any determination or ruling that might materially and adversely affect the performance by the Seller of its obligations under, or the validity or enforceability of, this Agreement or any other Basic Document to which the Seller is a party. 5 (vi) Valid Sale, Binding Obligation. This Agreement and the other Basic Documents to which the Seller is a party, when duly executed and delivered by the other parties hereto and thereto, shall constitute legal, valid and binding obligations of the Seller, enforceable against the Seller in accordance with their respective terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization and similar laws now or hereafter in effect relating to or affecting creditors' rights generally and to general principles of equity (whether applied in a proceeding at law or in equity). (vii) Chief Executive Office. The chief executive office of the Seller is located at 10550 Talbert Avenue, Fountain Valley, California 92708. (viii) No Consents. The Seller is not required to obtain the consent of any other party or any consent, license, approval, registration, authorization, or declaration of or with any governmental authority, bureau or agency in connection with the execution, delivery, performance, validity, or enforceability of this Agreement or any other Basic Document to which it is a party that has not already been obtained. (ix) Seller Information. No certificate of an officer, statement or document furnished in writing or report delivered pursuant to the terms hereof by the Seller contains any untrue statement of a material fact or omits to state any material fact necessary to make the certificate, statement, document or report not misleading. (x) Ordinary Course. The transactions contemplated by this Agreement and the other Basic Documents to which the Seller is a party are in the ordinary course of the Seller's business. (xi) Solvency. The Seller is not insolvent, nor will the Seller be made insolvent by the transfer of the Receivables, nor does the Seller contemplate any pending insolvency. (xii) Legal Compliance. The Seller is not in violation of, and the execution and delivery of this Agreement and the other Basic Documents to which the Seller is a party by it and its performance and compliance with the terms of this Agreement and the other Basic Documents to which the Seller is a party will not constitute a violation with respect to, any order or decree of any court or any order or regulation of any federal, state, municipal or governmental agency having jurisdiction, which violation would materially and adversely affect the Seller's condition (financial or otherwise) or operations or any of the Seller's properties or materially and adversely affect the performance of any of its duties under the Basic Documents. (xiii) Creditors. The Seller represents and warrants that it did not sell the Receivables to the Depositor with any intent to hinder, delay or defraud any of its creditors. (xiv) No Notice. The Seller represents and warrants that it acquired title to the Receivables in good faith, without notice of any adverse claim. 6 (xv) Bulk Transfer. The Seller represents and warrants that the transfer, assignment and conveyance of the Receivables by the Seller pursuant to this Agreement are not subject to the bulk transfer laws or any similar statutory provisions in effect in any applicable jurisdiction. (b) The Seller makes the following representations and warranties with respect to the Receivables, on which the Depositor relies in accepting the Receivables and in transferring the Receivables to the Issuer under the Sale and Servicing Agreement, and on which the Issuer relies in pledging the same to the Indenture Trustee. Such representations and warranties speak as of the execution and delivery of this Agreement as of the Closing Date, but shall survive the sale, transfer and assignment of the Receivables to the Depositor, the subsequent sale, transfer and assignment of the Receivables by the Depositor to the Issuer pursuant to the Sale and Servicing Agreement and the pledge of the Receivables by the Issuer to the Indenture Trustee pursuant to the Indenture. (i) Characteristics of Receivables. Each Receivable (A) was originated in the United States of America by a Dealer located in the United States of America for the retail sale of a Financed Vehicle in the ordinary course of such Dealer's business in accordance with the Seller's Credit and Collection Policy as of the date of origination of the related Receivable, is payable in United States dollars, has been fully and properly executed by the parties thereto, has been purchased by the Seller from such Dealer under an existing Dealer Agreement and has been validly assigned by such Dealer to the Seller, (B) has created or shall create a valid, subsisting and enforceable first priority security interest in favor of the Seller in the Financed Vehicle, which security interest is assignable by the Seller to the Depositor, and by the Depositor to the Issuer, (C) contains customary and enforceable provisions such that the rights and remedies of the holder thereof are adequate for realization against the collateral of the benefits of the security, (D) provides for fixed level monthly payments (provided that the payment in the last month of the term of the Receivable may be insignificantly different from the level payments) that fully amortize the Amount Financed by maturity and yield interest at the APR and (E) amortizes using the simple interest method. (ii) Compliance with Law. Each Receivable and the sale of the related Financed Vehicle complied at the time it was originated or made, and at the time of execution of this Agreement complies, in all material respects with all requirements of applicable federal, state and local laws, rulings and regulations thereunder, including usury laws, the Federal Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit Billing Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the Federal Trade Commission Act, the Magnuson-Moss Warranty Act, the Federal Reserve Board's Regulations "B" and "Z", the Soldiers' and Sailors' Civil Relief Act of 1940, the Gramm-Leach-Bliley Act, the Texas Consumer Credit Code and state adaptations of the National Consumer Act and of the Uniform Consumer Credit Code, and other consumer credit laws and equal credit opportunity and disclosure laws; and each Dealer has represented to the Seller that such Dealer had all necessary licenses and permits to originate such Receivables. 7 (iii) Binding Obligation. Each Receivable represents the genuine, legal, valid and binding payment obligation of the Obligor thereon, enforceable by the holder thereof in accordance with its terms, except (A) as enforceability thereof may be limited by bankruptcy, insolvency, reorganization or similar laws affecting the enforcement of creditors' rights generally and by equitable limitations on the availability of specific remedies, regardless of whether such enforceability is considered in a proceeding in equity or at law and (B) as such Receivable may be modified by the application after the Transfer Date of the Soldiers' and Sailors' Civil Relief Act of 1940, as amended. (iv) No Government Obligor. No Receivable is due from the United States of America or any State or any agency, department, subdivision or instrumentality thereof. (v) Obligor Bankruptcy. At the Cutoff Date, no Obligor is or has been, since the origination of the related Receivable, the subject of a bankruptcy proceeding. (vi) Schedule of Receivables. The information set forth in Schedule I to this Agreement is true and correct in all material respects as of the close of business on the Cutoff Date. (vii) Marking Records. By the Transfer Date, the Seller will have caused its computer and accounting records relating to each Receivable to be clearly and unambiguously marked to show that the Receivables have been sold to the Depositor by the Seller and transferred and assigned by the Depositor to the Issuer in accordance with the terms of the Sale and Servicing Agreement and pledged by the Issuer to the Indenture Trustee in accordance with the terms of the Indenture. (viii) Computer Tape. The computer tape regarding the Receivables made available by the Seller to the Depositor is complete and accurate in all respects as of the Transfer Date. (ix) No Adverse Selection. No selection procedures believed by the Seller to be adverse to the Noteholders or the Certificateholder were utilized in selecting the Receivables. (x) Chattel Paper. Each Receivable constitutes chattel paper within the meaning of the UCC as in effect in the state of origination. (xi) One Original. There is only one original executed copy of each Receivable. (xii) Receivables in Force. No Receivable has been satisfied, subordinated or rescinded, nor has any Financed Vehicle been released from the Lien of the related Receivable in whole or in part. None of the terms of any Receivable has been waived, altered or modified in any respect since its origination, except by instruments or documents identified in the related Receivable File. No Receivable has been modified as a result of the application of the Soldiers' and Sailors' Civil Relief Act of 1940, as amended. 8 (xiii) Lawful Assignment. No Receivable has been originated in, or is subject to the laws of, any jurisdiction the laws of which would make unlawful, void or voidable the sale, transfer and assignment of such Receivable under this Agreement, the Sale and Servicing Agreement or the pledge of such Receivable under the Indenture. (xiv) Title. It is the intention of the Seller that the transfers and assignments herein contemplated constitute sales of the Receivables from the Seller to the Depositor and that the beneficial interest in and title to the Receivables not be part of the debtor's estate in the event of the filing of a bankruptcy petition by or against the Seller under any bankruptcy law. No Receivable, other than the Receivables identified in the Reconveyance Documents, has been sold, transferred, assigned or pledged by the Seller to any Person other than to the Depositor or pursuant to this Agreement (or by the Depositor to any other Person other than to the Issuer pursuant to the Sale and Servicing Agreement). Except with respect to the Liens under the Conduit Documents (which such Liens shall be released in accordance with provisions of the Reconveyance Documents), immediately prior to the transfers and assignments herein contemplated, the Seller has good and marketable title to each Receivable free and clear of all Liens, and, immediately upon the transfer thereof, the Depositor shall have good and marketable title to each Receivable, free and clear of all Liens and, immediately upon the transfer thereof from the Depositor to the Issuer pursuant to the Sale and Servicing Agreement, the Issuer shall have good and marketable title to each Receivable, free and clear of all Liens and, immediately upon the pledge thereof from the Issuer to the Indenture Trustee pursuant to the Indenture, the Indenture Trustee shall have a first priority perfected security interest in each Receivable. (xv) Security Interest in Financed Vehicle. Immediately prior to its sale, assignment and transfer to the Depositor pursuant to this Agreement, each Receivable shall be secured by a validly perfected first priority security interest in the related Financed Vehicle in favor of the Seller as secured party, or all necessary and appropriate actions have been commenced that will result in the valid perfection of a first priority security interest in such Financed Vehicle in favor of the Seller as secured party. The Lien Certificate for each Financed Vehicle shows, or if a new or replacement Lien Certificate is being applied for with respect to such Financed Vehicle such Lien Certificate shall be received within 120 days of the Closing Date and shall show, the Seller named as the original secured party under each Receivable as the holder of a first priority security interest in such Financed Vehicle. With respect to each Receivable for which the Lien Certificate has not yet been returned from the Registrar of Titles, the Seller has received written evidence that such Lien Certificate showing the Seller as first lienholder has been applied for. Each Dealer's security interest in any Receivable originated by such Dealer has been validly assigned by the Dealer to the Seller. The Seller's security interest has been validly assigned to the Depositor pursuant to this Agreement. The Seller has the legal right to repossess or recover by legal process the Financed Vehicle in its name. (xvi) All Filings Made. All filings (including UCC filings, except for UCC releases required to be filed in accordance with the Reconveyance Documents) required to be made in any jurisdiction to give the Issuer a first perfected ownership interest in the 9 Receivables and the Indenture Trustee a first priority perfected security interest in the Receivables have been made. (xvii) No Defenses. No Receivable is subject to any right of rescission, setoff, counterclaim, dispute or defense, including the defense of usury, whether arising out of transactions concerning the Receivable or otherwise, and the operation of any terms of the Receivable or the exercise by the Seller or the Obligor of any right under the Receivable will not render the Receivable unenforceable in whole or in part, and no such right of rescission, setoff, counterclaim, dispute or defense, including the defense of usury, has been asserted with respect thereto. (xviii) No Default. There has been no default, breach, violation or event permitting acceleration under the terms of any Receivable (other than payment delinquencies of not more than 30 days), and no condition exists or event has occurred and is continuing that with notice, the lapse of time or both would constitute a default, breach, violation or event permitting acceleration under the terms of any Receivable, and there has been no waiver of any of the foregoing. (xix) Insurance. The Seller, in accordance with its customary procedures, has determined that the Obligor has obtained physical damage insurance covering each Financed Vehicle and, under the terms of the related Receivable, the Obligor is required to maintain such insurance and to name the Seller as a loss payee. (xx) Final Scheduled Maturity Date. No Receivable has a final scheduled payment date after October 11, 2009. (xxi) Certain Characteristics of the Receivables. As of the applicable Cutoff Date, (A) each Receivable had an original maturity of not less than 12 or more than 72 months and (B) no Receivable was more than 5 days past due as of the Cutoff Date. (xxii) No Foreign Obligor. All of the Receivables are due from Obligors who are citizens, or legal resident aliens, of the United States of America. (xxiii) No Extensions. The number or timing of scheduled payments has not been changed on any Receivable on or before the Closing Date, as applicable, except as reflected on the computer tape delivered in connection with the sale of the Receivables. (xxiv) Scheduled Payments. Each Obligor has been instructed to make all scheduled payments to the Post Office Boxes. To the best knowledge of the Seller, each Obligor has paid the entire down payment called for by the contract. (xxv) Dealer Agreements. The representations and warranties of the Dealer in the Dealer Agreement with respect to each Receivable purchased by the Seller pursuant to such Dealer Agreement were true and correct in all material respects as of the date the Seller acquired such Receivable from that Dealer. (xxvi) No Fleet Sales. No Receivable has been included in a "fleet" sale (i.e., a sale to any single Obligor of more than five Financed Vehicles). 10 (xxvii) Receivable Files Complete. There exists a Receivable File pertaining to each Receivable and such Receivable File contains, without limitation, (A) a fully executed original of the Receivable, (B) a certificate of insurance, application form for insurance signed by the Obligor, or a signed representation letter from the Obligor named in the Receivable pursuant to which the Obligor has agreed to obtain physical damage insurance for the related Financed Vehicle, (C) the original Lien Certificate or application therefor together with an assignment of the Lien Certificate executed by such Dealer to the Seller, (D) an original credit application signed by the Obligor and (E) the other documents that are set forth on Schedule II hereto. Each of such documents which is required to be signed by the Obligor has been signed by the Obligor in the appropriate spaces. All blanks on any form described in clauses (A), (B), (C), (D) and (E) above have been properly filled in and each form has otherwise been correctly prepared. Notwithstanding the above, the complete Receivable File for each Receivable, (x) shall fulfill the documentation requirements of the Seller's Credit and Collection Policy as in effect on the date of origination of such Receivable and (y) is in possession of the Servicer on the Transfer Date. The blanket power of attorney granted to the Indenture Trustee and the original Lien Certificate are the only documents necessary to permit the Indenture Trustee to submit the Lien Certificate for each Financed Vehicle for retitling in the name of the Indenture Trustee as secured party in the event such retitling were required or otherwise permitted under the Basic Documents. (xxviii) No Fraud or Misrepresentation. Each Receivable was originated by a Dealer and was sold by the Dealer to the Seller, to the best of the Seller's knowledge, without fraud or misrepresentation on the part of such Dealer in either case. (xxix) Receivables Not Assumable. No Receivable is assumable by another person in a manner which would release the Obligor thereof from such Obligor's obligations to the Seller with respect to such Receivable. (xxx) No Impairment. The Seller has not done anything to convey any right to any person that would result in such person having a right to payments due under a Receivable or otherwise to impair the rights of the Depositor in any Receivable or the proceeds thereof. (xxxi) Tax Liens. There is no Lien against any Financed Vehicle for delinquent taxes. (xxxii) No Corporate Obligor. All of the Receivables are due from Obligors who are natural persons. (xxxiii) No Liens. No Liens or claims have been filed for work, labor, or materials relating to a Financed Vehicle that are prior to, or equal or coordinate with, the security interest in the Financed Vehicle granted by the related Receivable. (xxxiv) Servicing. Each Receivable has been serviced in conformity with all applicable laws, rules and regulation and in conformity with the Seller's policies and procedures which are consistent with customary, prudent industry standards. 11 (xxxv) APR. No Receivable has an APR of less than 0.00% and the weighted average coupon on the pool of Receivables is at least 7.296%. (xxxvi) Remaining Term. Each Receivable has a remaining term of at least 3 months and no more than 72 months. (xxxvii) Original Term. The weighted average original term for the Receivables is at least 62.3 months. (xxxviii) Remaining Balance. Each Receivable has a remaining balance of at least $2,013.03 and not greater than $38,824.90. (xxxix) New Vehicles. At least 95.36% of the aggregate principal balance of the Receivables is secured by Financed Vehicles which were new at the date of origination. (xl) No Advances. No advances have been made to Obligors in order to meet any representation and warranties herein set forth. (xli) No Repossessions. No Financed Vehicle has been repossessed on or prior to the applicable Transfer Date. (xlii) No Omissions. There have been no material omissions or misstatements in any document provided or statement made to the Depositor concerning the Receivables by or on behalf of the Seller in connection with the transactions contemplated by this Agreement. (xliii) No Proceedings Pending. As of the Cutoff Date, there are no proceedings pending, or to the best of the Seller's knowledge, threatened, wherein the Obligor or any governmental agency has alleged that any Receivable is illegal or unenforceable. (xliv) Dealer Agreements. Each Dealer from whom the Seller purchases Receivables has entered into a Dealer Agreement with the Seller providing for the sale of Receivables from time to time by such Dealer to the Seller. (xlv) Receivable Obligations. The Seller has duly fulfilled all obligations to be fulfilled on its part under or in connection with the origination, acquisition and assignment of the Receivables. To the best of the Seller's knowledge, no notice to or consent from any Obligor is necessary to effect the acquisition of the Receivables by the Indenture Trustee. (xlvi) Taxes. The sale, transfer, assignment and conveyance of the Receivables by the Seller pursuant to this Agreement is not subject to and will not result in any tax, fee or governmental charge payable by the Seller, the Issuer or the Indenture Trustee to any federal, state or local government ("Transfer Taxes") other than Transfer Taxes which have or will be paid by the Seller as due. In the event the Issuer or the Indenture Trustee receives actual notice of any Transfer Taxes arising out of the transfer, assignment and conveyance of the Receivables, on written demand by the Issuer or the Indenture Trustee, or upon the Seller's otherwise being given notice thereof by the Issuer 12 or the Indenture Trustee, the Seller shall pay, and otherwise indemnify and hold the Issuer and the Indenture Trustee harmless, on an after-tax basis, from and against any and all such Transfer Taxes (it being understood that the Noteholders, the Indenture Trustee and the Issuer shall have no obligation to pay such Transfer Taxes). (xlvii) Computer Tape. The computer tape from which the selection of the Receivables being acquired on the Closing Date was made available to the accountants that are providing a comfort letter to the Noteholders in connection with the numerical information regarding the Receivables and the Notes. (xlviii) No Future Disbursement. At the time each Receivable was acquired from the Dealer, the Amount Financed was fully disbursed. There is no requirement for future advances of principal thereunder, and, other than in connection with Dealer participations, all fees and expenses in connection with the origination of such Receivable have been paid. (xlix) Physical Damage Insurance Policy. In connection with the purchase of each Receivable, the Seller required the related Dealer to furnish evidence that the related Financed Vehicle was covered by a physical damage insurance policy (i) in an amount at least equal to the lesser of (a) the actual cash value of the related Financed Vehicle or (b) the unpaid principal balance owing on such Receivable, (ii) naming the Seller as a loss payee and (iii) insuring against loss and damage due to fire, theft, transportation, collision and other risks generally covered by comprehensive and collision coverage. (l) Dealer Agreement. The Dealer that sold each Receivable to the Seller has entered into the Dealer Agreement and such Dealer Agreement, together with the assignment and related documentation signed by the Dealer, constitutes the entire agreement between the Seller and the related Dealer with respect to the sale of such Receivable to the Seller. Each such Dealer Agreement is in full force and effect and is the legal, valid and binding obligation of such Dealer; there have been no material defaults by such Dealer or by the Seller under such Dealer Agreement; the Seller has fully performed all of its obligations under such Dealer Agreement; the Seller has not made any statements or representations to such Dealer (whether written or oral) inconsistent with any term of such Dealer Agreement; the Purchase Price (as specified in the applicable Dealer Agreement) for such Receivable has been paid in full by the Seller; there is no other payment of principal due to such Dealer from the Seller for the purchase of such Receivable; such Dealer has no right, title or interest in or to any Receivable; there is no prior course of dealing between such Dealer and the Seller which will materially and adversely affect the terms of such Dealer Agreement; and any payment owed to such Dealer by the Seller is a corporate obligation of the Seller. (li) Condition of Financed Vehicle. Each Receivable requires the Obligor to maintain the related Financed Vehicle in good and workable order. (lii) Condition of Financed Vehicle as of Transfer Date. To the best of the Seller's knowledge, each Financed Vehicle was properly delivered to the related Obligor 13 in good repair, without defects and in satisfactory order, and each Financed Vehicle is in good operating condition and repair as of the Transfer Date. (liii) Business of Obligor. To the best of the Seller's knowledge, no Obligor is a Person involved in the business of leasing or selling equipment of a type similar to the Financed Vehicles. (liv) No Consumer Leases. No Receivable constitutes a "consumer lease" under either (a) the UCC as in effect in the jurisdiction whose law governs the Receivable or (b) the Consumer Leasing Act, 15 USC 1667. (lv) Balance as of Cutoff Date. The aggregate principal balance of the Receivables as of the Cutoff Date is equal to $815,463,348.54. (lvi) Prepayment or Termination. No Receivable permits early termination or prepayment unless the amount to be paid by or on behalf of the Obligor in respect of such prepayment or termination is at all times equal to or in excess of what the related Purchase Amount would be. ARTICLE IV Conditions Section 4.01. Conditions to Obligation of the Depositor. The obligation of the Depositor to purchase the Receivables is subject to the satisfaction of the following conditions: (a) Representations and Warranties True. The representations and warranties of the Seller hereunder shall be true and correct on the Transfer Date with the same effect as if then made, and the Seller shall have performed all obligations to be performed by it hereunder on or prior to the Transfer Date. (b) Computer Files Marked. The Seller shall, at its own expense, on or prior to the Transfer Date, indicate in its computer files that the Receivables have been sold to the Depositor pursuant to this Agreement and deliver to the Depositor the Schedule of Receivables, certified by the Seller's President, a Vice President or the Treasurer to be true, correct and complete. (c) Documents To Be Delivered by the Seller on the Transfer Date. (i) Evidence of UCC Filing. On or prior to the Transfer Date, the Seller shall record and file, at its own expense, a UCC-1 financing statement, in each jurisdiction in which required by applicable law, naming the Seller as debtor and naming the Depositor as secured party, describing the Receivables and the other assets assigned to the Depositor pursuant to Section 2.01 hereof, meeting the requirements of the laws of each such jurisdiction and in such manner as is necessary to perfect the sale, transfer, assignment and conveyance of the Receivables and such other assets to the Depositor. The Seller shall deliver to the 14 Depositor a file-stamped copy or other evidence satisfactory to the Depositor of such filing on or prior to the Transfer Date. (ii) Other Documents. Such other documents as the Depositor may reasonably request. (d) Other Transactions. The transactions contemplated by the Sale and Servicing Agreement, the Indenture and the Trust Agreement to be consummated on the Transfer Date shall be consummated on such date. Section 4.02. Conditions to Obligation of the Seller. The obligation of the Seller to sell the Receivables to the Depositor is subject to the satisfaction of the following conditions: (a) Representations and Warranties True. The representations and warranties of the Depositor hereunder shall be true and correct on the Transfer Date with the same effect as if then made, and the Depositor shall have performed all obligations to be performed by it hereunder on or prior to the Transfer Date. (b) Receivables Purchase Price. On the Transfer Date, the Depositor shall have delivered to the Seller the Purchase Price specified in Section 2.01. ARTICLE V Covenants of the Seller The Seller agrees with the Depositor and the Indenture Trustee as follows: Section 5.01. Protection of Right, Title and Interest. (a) Filings. The Seller shall cause, at its own expense, all financing statements and continuation statements and any other necessary documents (other than the costs to re-title the Financed Vehicles in order to name a party other than the Seller as lienholder) covering the right, title and interest of the Seller, the Depositor, the Trust and the Indenture Trustee, respectively, in and to the Receivables and the other property included in the Trust Estate to be promptly filed and at all times to be kept recorded, registered and filed, all in such manner and in such places as may be required by law fully to preserve and protect the right, title and interest of the Depositor hereunder, the Trust under the Sale and Servicing Agreement and the Indenture Trustee under the Indenture in and to the Receivables and the other property included in the Trust Estate. The Seller shall deliver to the Depositor and the Indenture Trustee file-stamped copies of, or filing receipts for, any document recorded, registered or filed as provided above, as soon as available following such recordation, registration or filing. The Depositor shall cooperate fully with the Seller in connection with the obligations set forth above and will execute any and all documents reasonably required to fulfill the intent of this paragraph. (b) Name Change. If the Seller makes any change in its name, identity or corporate structure that would make any financing statement or continuation statement filed in accordance with paragraph (a) above seriously misleading within the applicable provisions of the UCC or any title statute, the Seller shall give the Depositor, the Indenture Trustee and the Owner Trustee 15 written notice thereof at least 45 days prior to such change and shall promptly file such financing statements or amendments as may be necessary to continue the perfection of the Depositor's interest in the property conveyed pursuant to Section 2.01. Section 5.02. Other Liens or Interests. Except for the conveyances hereunder and pursuant to the Basic Documents, the Seller shall not sell, pledge, assign or transfer to any Person, or grant, create, incur, assume, or suffer to exist any Lien on, or any interest in, to or under the Receivables, and the Seller shall defend the right, title and interest of the Depositor, the Trust and the Indenture Trustee in, to and under the Receivables against all claims of third parties claiming through or under the Seller. Section 5.03. Costs and Expenses. The Seller agrees to pay all reasonable costs and disbursements in connection with the perfection, as against all third parties, of the Depositor's, the Issuer's and the Indenture Trustee's right, title and interest in and to the Receivables and the other property included in the Trust Estate. Section 5.04. Hold Harmless. Seller shall protect, defend, indemnify and hold the Depositor and the Issuer and their respective assigns and their attorneys, accountants, employees, officers and directors harmless from and against all losses, liabilities, claims, damages and expenses of every kind and character, as incurred, resulting from or relating to or arising out of (i) the inaccuracy, nonfulfillment or breach of any representation, warranty, covenant or agreement made by Seller in this Agreement, (ii) any legal action, including, without limitation, any counterclaim, that has either been settled by the litigants (which settlement, if Seller is not a party thereto shall be with the consent of Seller) or has proceeded to judgment by a court of competent jurisdiction, in either case to the extent it is based upon alleged facts that, if true, would constitute a breach of any representation, warranty, covenant or agreement made by Seller in this Agreement, (iii) any actions or omissions of Seller or any employee or agent of Seller or any Dealer occurring prior to the Transfer Date with respect to any of the Receivables or Financed Vehicles or (iv) any failure of a Receivable to be originated in compliance with all requirements of law. These indemnity obligations shall be in addition to any obligation that the Seller may otherwise have. ARTICLE VI Indemnification Section 6.01. Indemnification. Without limiting any other rights any such Person may have hereunder or under applicable law, the Seller hereby indemnifies and holds harmless the Depositor and its officers, directors, agents and employees (each an "Indemnified Party") from and against any and all damages, losses, claims, liabilities, penalties, costs and expenses (including reasonable attorneys' fees and court costs) (all of the foregoing collectively, the "Indemnified Losses") at any time imposed on or incurred by any Indemnified Party arising out of or otherwise relating to this Agreement, the transactions contemplated hereby or the acquisition of any of the Receivables, or any action taken or omitted by any of the Indemnified Parties, whether arising by reason of the acts to be performed by the Seller hereunder or otherwise, excluding only Indemnified Losses to 16 the extent (a) such Indemnified Losses resulted from gross negligence or willful misconduct of the Indemnified Party seeking indemnification, (b) due to the financial inability of the Obligor to pay a Receivable and for which reimbursement would constitute recourse to the Seller for uncollectible Receivables or (c) such Indemnified Losses include taxes on, or measured by, the overall net income of the Depositor or any other Indemnified Party. ARTICLE VII Miscellaneous Provisions Section 7.01. Obligations of Seller. The obligations of the Seller under this Agreement shall not be affected by reason of any invalidity, illegality or irregularity of any Receivable. Section 7.02. Repurchase Events. The Seller hereby covenants and agrees with the Depositor for the benefit of the Depositor, the Indenture Trustee, the Issuer, the Owner Trustee, the Certificateholder and the Noteholders that the occurrence of a breach of any of the Seller's representations and warranties contained in Section 3.02(b), without regard to any limitation set forth in such representation or warranty concerning the knowledge of the Seller as to the facts stated therein, with respect to any Receivable shall constitute an event obligating the Seller to repurchase such Receivables if the interests of the Depositor, the Indenture Trustee, the Owner Trustee, the Issuer and the Securityholders are materially and adversely affected by such breach (each, a "Repurchase Event"), at the Purchase Amount, from the Depositor or from the Issuer, as applicable, unless any such breach shall have been cured by the last day of the first Collection Period following the discovery or notice thereof by or to the Seller or the Servicer. The repurchase obligation of the Seller shall constitute the sole remedy available to the Depositor, the Indenture Trustee, the Owner Trustee, the Issuer and the Securityholders against the Seller with respect to any Repurchase Event. Section 7.03. Depositor Assignment of Repurchased Receivables. With respect to all Receivables repurchased by the Seller pursuant to this Agreement, the Depositor shall assign, without recourse, representation or warranty, to the Seller all of the Depositor's right, title and interest in and to such Receivables and all security and documents relating thereto. Section 7.04. Transfer to the Issuer. The Seller acknowledges and agrees that (1) the Depositor will, pursuant to the Sale and Servicing Agreement, transfer and assign the Receivables and assign its rights under this Agreement with respect thereto to the Issuer and, pursuant to the Indenture, the Issuer will pledge the Receivables to the Indenture Trustee, and (2) the representations and warranties contained in this Agreement and the rights of the Depositor under this Agreement, including under Section 7.02, are intended to benefit the Issuer, the Noteholders and the Certificateholder. The Seller hereby consents to such transfers and assignments and agrees that enforcement of a right or remedy hereunder by the Indenture Trustee, the Owner Trustee or the Issuer shall have the same force and effect as if the right or remedy had been enforced or executed by the Depositor. Section 7.05. Amendment. This Agreement may be amended from time to time, with prior written notice to the Rating Agencies but without the consent of the Noteholders or the Certificateholder, by a written amendment duly executed and delivered by the Seller and the 17 Depositor, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of modifying in any manner the rights of Noteholders or the Certificateholder; provided that such amendment shall not, as evidenced by an Opinion of Counsel, materially and adversely affect the interest of any Noteholder or Certificateholder. This Agreement may also be amended by the Seller and the Depositor, with prior written notice to the Rating Agencies and the prior written consent of Holders of Notes evidencing at least a majority of the Outstanding Amount of the Notes and Holders of Certificates evidencing at least a majority of the Certificate Balance (excluding, for purposes of this Section 7.05, Certificates held by the Seller or any of its affiliates), for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of modifying in any manner the rights of the Noteholders or the Certificateholder; provided, however, that no such amendment may (i) increase or reduce in any manner the amount of, or accelerate or delay the timing of, collections of payments on Receivables or distributions that are required to be made for the benefit of Noteholders or the Certificateholder or (ii) reduce the aforesaid percentage of the Notes or the Certificates that is required to consent to any such amendment, without the consent of the Holders of all the outstanding Notes and Certificates. Section 7.06. Waivers. No failure or delay on the part of the Depositor, the Issuer or the Indenture Trustee in exercising any power, right or remedy under this Agreement or the Bill of Sale shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or remedy preclude any other or further exercise thereof or the exercise of any other power, right or remedy. Section 7.07. Notices. All demands, notices and communications under this Agreement shall be in writing, personally delivered or mailed by certified mail, return receipt requested, to: (1) in the case of the Seller, Hyundai Motor Finance Company, 10550 Talbert Avenue, Fountain Valley, California 92708, Attention: Vice President, Finance, with a copy to General Counsel; (2) in the case of the Depositor, Hyundai ABS Funding Corporation, 10550 Talbert Avenue, Fountain Valley, California 92708, Attention: Vice President and Secretary, with a copy to General Counsel; (3) in the case of Moody's, Moody's Investors Service, Inc., ABS Monitoring Department, 99 Church Street, New York, New York 10007; (4) in the case of Standard & Poor's, Standard & Poor's, a division of The McGraw-Hill Companies, Inc., 55 Water Street (40th Floor), New York, New York 10041, Attention: Asset Backed Surveillance Department; (5) in the case of Fitch, Fitch, Inc., One State Street Plaza, New York, New York 10004;or as to each of the foregoing, at such other address as shall be designated by written notice to the other parties. Section 7.08. Costs and Expenses. The Seller shall pay all expenses incident to the performance of its obligations under this Agreement and the Seller agrees to pay all reasonable out-of-pocket costs and expenses of the Depositor, in connection with the perfection as against third parties of the Depositor's, the Issuer's and the Indenture Trustee's right, title and interest in and to the Receivables and the enforcement of any obligation of the Seller hereunder. Section 7.09. Representations of the Seller and the Depositor. The respective agreements, representations, warranties and other statements by the Seller and the Depositor set forth in or made pursuant to this Agreement shall remain in full force and effect and will survive the closing under Section 2.02 and the transfers and assignments referred to in Section 7.04. 18 Section 7.10. Confidential Information. The Depositor agrees that it will neither use nor disclose to any Person the names and addresses of the Obligors, except to enforce the Depositor's rights hereunder, under the Receivables, under the Sale and Servicing Agreement or any other Basic Document, or as required by any of the foregoing or by law. Section 7.11. Headings and Cross-References. The various headings in this Agreement are included for convenience only and shall not affect the meaning or interpretation of any provision of this Agreement. References in this Agreement to section names or numbers are to such Sections of this Agreement. Section 7.12. GOVERNING LAW. THIS AGREEMENT AND THE ASSIGNMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER OR THEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. Section 7.13. Counterparts. This Agreement may be executed in counterparts, each of which shall be an original, but all of which together shall constitute one and the same instrument. Section 7.14. Third Party Beneficiary. The Indenture Trustee is an express third party beneficiary of this Agreement and shall be entitled to enforce the provisions of this Agreement as if it were a party hereto. Section 7.15. No Proceedings. So long as this Agreement is in effect, and for one year plus one day following its termination, the Seller agrees that it will not file any involuntary petition or otherwise institute any bankruptcy, reorganization arrangement, insolvency or liquidation proceeding or other proceedings under any federal or state bankruptcy law or similar law against the Trust. Section 7.16. Nonpetition Covenant. Notwithstanding any prior termination of this Agreement, the Seller shall not, prior to the date that is one year and one day after the termination of this Agreement with respect to the Depositor, acquiesce, petition or otherwise invoke or cause the Depositor to invoke the process of any court or government authority for the purpose of commencing or sustaining a case against the Depositor under any federal or state bankruptcy, insolvency or similar law, or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Depositor or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Depositor. 19 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective duly authorized officers as of the date and year first above written. HYUNDAI MOTOR FINANCE COMPANY By: /s/ David A. Hoeller --------------------------------- Name: David A. Hoeller Title: Vice President, Finance HYUNDAI ABS FUNDING CORPORATION By: /s/ David A. Hoeller --------------------------------- Name: David A. Hoeller Title: Vice President & Secretary EXHIBIT A Subordinated Promissory Note November 7, 2003 FOR VALUE RECEIVED, HYUNDAI ABS FUNDING CORPORATION ("Depositor"), hereby promises to pay to the order of HYUNDAI MOTOR FINANCE COMPANY ("Seller"), at the principal office of Seller at 10550 Talbert Avenue, Fountain Valley, California, or at such other place as Seller may designate from time to time, the unpaid principal amount hereof, together with accrued interest thereon at a rate per annum equal to the prime rate as published on such day (or, if not then published, on the most recently preceding day) in The Wall Street Journal as the "Prime Rate" (changes in the rate payable hereunder shall be effective on each day on which a change in the Prime Rate is published), in lawful money of the United States of America and in immediately available funds, on the sixtieth (60th) day after the termination of the Purchase Agreement referred to below or, if such sixtieth (60th) day is not a Business Day, on the first Business Day thereafter (such sixtieth (60th) day or later Business Day being referred to as the "Maturity Date"), together with costs of collection and reasonable attorney's fees incurred by Seller in the collection of the indebtedness evidenced hereby. Except as otherwise defined herein, capitalized terms used herein and defined in the Receivables Purchase Agreement dated as of November 7, 2003 between Depositor and Seller (as amended and modified or supplemented from time to time the "Purchase Agreement") shall be used herein as so defined. Interest shall be computed hereunder for the actual number of days elapsed on the basis of a year consisting of three hundred sixty five (365) days. All accrued interest on the principal amount of this Note will be due and payable on each Settlement Date; provided, however, that on or prior to the Maturity Date, unless Seller instructs Depositor otherwise, such interest may be paid by means of an increase in the amount of the unpaid principal amount hereof by an amount equal to the interest being so paid. The principal amount of this Note shall be initially established and thereafter adjusted from time to time in accordance with the terms and conditions of the Purchase Agreement (the terms and conditions of which are hereby incorporated in this Note by this reference) and the terms of this Note. Seller shall record the initial principal amount of this Note, all adjustments thereto and all payments thereof on Schedule A annexed hereto and made a part hereof, or on a continuation thereof which shall be attached hereto and made a part hereof, and any such recordation shall, absent manifest error, constitute prima facie evidence of the information so recorded; provided, however, that the failure to so record shall not limit the obligations of Depositor hereunder or under the Purchase Agreement. Depositor and, by its acceptance of this Note, Seller hereby acknowledge and agree that any and all payments made or payable in respect of this Note are and shall remain subordinate and junior in right of payment to any right of the seven classes of notes, designated as 1.11% Asset Backed Notes, Class A-1, 1.56% Asset Backed Notes, Class A-2, 2.33% Asset Backed Notes, Class A-3, 3.02% Asset Backed Notes, Class A-4, 2.99% Asset Backed Notes, Class B, 3.19% Asset Backed Notes, Class C, and 4.06% Asset Backed Notes, Class D, issued pursuant to the Indenture, dated as of November 7, 2003 (as amended, supplemented, amended and restated or otherwise modified from time to time), between the Hyundai Auto Receivables Trust 2003-A and Wells Fargo Bank Minnesota, National Association and the Hyundai Auto Receivables Trust 2003-A Asset Backed Trust Certificates, issued pursuant to the Amended and Restated Trust Agreement, dated as of November 7, 2003 (as amended, supplemented, amended and restated or otherwise modified from time to time, the "Trust Agreement"), between the Depositor and Wilmington Trust Company, acting not in its individual capacity but solely as owner trustee under the Trust Agreement, to receive any payment by the Depositor thereunder. Depositor shall have the right to pay all or any part of the unpaid principal amount of this Note without premium or penalty at any time; provided, that interest shall be paid on the amount repaid to and including the date of repayment. Depositor hereby waives presentment, diligence, notice of dishonor, payment, demand, protest, notice of protest, notice of nonpayment and all other demands and notices of every kind in connection with the delivery, acceptance, performance and enforcement of this Note and, to the full extent permitted by law, the right to plead any statute of limitations as a defense to any demands hereunder. Depositor and, by its acceptance of this Note, Seller also assent to extension of the time of payment, forbearance or other indulgence without notice. This Note applies to, inures to the benefit of, and binds the successors and assigns of, Depositor and Seller. Neither Depositor nor Seller may assign any duties or obligations hereunder without the prior written consent of the other party. THIS NOTE IS MADE UNDER, AND ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS NOTE SHALL BE GOVERNED BY, THE INTERNAL LAWS OF THE STATE OF NEW YORK. On the first Business Day after the Maturity Date at the close of business of which all principal and accrued interest owing on this Note have been paid in full, this Note will be surrendered to Depositor for cancellation. IN WITNESS WHEREOF, Depositor has executed and delivered this Note by its duly authorized officer as of the day hereof. HYUNDAI ABS FUNDING CORPORATION By: --------------------------------- Name: Title: ANNEX I to EXHIBIT A ANNEX A REVOLVING PROMISSORY NOTE
UNPAID PRINCIPAL INCREASE IN DECREASE IN AMOUNT PRINCIPAL PRINCIPAL AFTER REASON FOR NOTATION DATE AMOUNT AMOUNT ADJUSTMENT ADJUSTMENT* MADE BY - ---- ----------- ----------- ---------- --------------- -------- $ Initial Balance
- ---------- * Describe or use appropriate code specified below: A=increase in lieu of cash payment of interest B=increase/decrease pursuant to Section 1.2 of the Purchase and Sale Agreement C=decrease due to payment of principal SCHEDULE I Schedule of Receivables [To be delivered to the Trust at Closing] SCHEDULE II Receivable File Schedule 1. All documents obtained or created in connection with the credit investigation. 2. All Obligor records including without limitation (i) file copy of Receivable; (ii) copy of Dealer assignment (if applicable) and any intervening assignments; (iii) warranty copy (if applicable); (iv) credit life insurance policy (if applicable); (v) proof of auto insurance or obligor agreement to provide such insurance; (vi) title application; (vii) contract verification sheet; and (viii) original application. 3. Original document envelope together with all documents maintained therein. 4. Any and all other documents that the Servicer shall keep on file in accordance with its customary procedures relating to a Receivable, an Obligor or a Financed Vehicle. SCHEDULE III Reconveyance Agreements Reconveyance and Release Agreement dated as of November 7, 2003 among Hyundai BC Funding Corporation, Societe Generale, Amsterdam Funding Corporation, Asset One Securitization, L.L.C. and Sheffield Receivables Corporation Receivables Transfer Agreement and Assignment, dated as of November 7, 2003 between Hyundai Motor Finance Company and Hyundai BC Funding Corporation SCHEDULE IV Conduit Documents Purchase and Sale Agreement dated as of January 17, 2000, as amended, between Hyundai Motor Finance Company and Hyundai BC Funding Corporation Second Amended and Restated Receivables Purchase Agreement dated as of July 23, 2002, as amended, among Hyundai BC Funding Corporation, Hyundai Motor Finance Company, Amsterdam Funding Corporation, Asset One Securities, L.L.C., Sheffield Receivables Corporation, ABN AMRO Bank N.V., Barclays Bank PLC and Societe Generale EX-10 9 ex10-3.txt EXHIBIT 10.3 Exhibit 10.3 EXECUTION COPY ================================================================================ OWNER TRUST ADMINISTRATION AGREEMENT among HYUNDAI AUTO RECEIVABLES TRUST 2003-A, HYUNDAI MOTOR FINANCE COMPANY, as Administrator, and WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, as Indenture Trustee Dated as of November 7, 2003 ================================================================================ EXECUTION COPY TABLE OF CONTENTS
Page ---- Section 1.1 Duties of the Administrator with Respect to the Depository Agreement and the Indenture........................................................2 Section 1.2 Additional Duties...........................................................5 Section 1.3 Non-Ministerial Matters.....................................................6 Section 2. Records.....................................................................7 Section 3. Compensation................................................................7 Section 4. Additional Information To Be Furnished to the Issuer........................7 Section 5. Independence of the Administrator...........................................7 Section 6. No Joint Venture............................................................7 Section 7. Other Activities of Administrator...........................................7 Section 8. Term of Agreement; Resignation and Removal of Administrator.................7 Section 9. Action upon Termination, Resignation or Removal.............................9 Section 10. Notices.....................................................................9 Section 11. Amendments.................................................................10 Section 12. Successors and Assigns.....................................................11 Section 13. GOVERNING LAW..............................................................11 Section 14. Headings...................................................................11 Section 15. Counterparts...............................................................11 Section 16. Severability...............................................................11 Section 17. Not Applicable to Wells Fargo Bank Minnesota, National Association in Other Capacities........................................................11 Section 18. Limitation of Liability of Owner Trustee and Indenture Trustee.............11 Section 19. Third-Party Beneficiary....................................................12
i Section 20. Nonpetition Covenants......................................................12 Section 21. Liability of Administrator.................................................12
ii EXECUTION COPY This OWNER TRUST ADMINISTRATION AGREEMENT dated as of November 7, 2003 among HYUNDAI AUTO RECEIVABLES TRUST 2003-A, a Delaware statutory trust (the "Issuer"), HYUNDAI MOTOR FINANCE COMPANY, a California corporation, as administrator (the "Administrator"), and WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking association, not in its individual capacity but solely as Indenture Trustee (the "Indenture Trustee"). W I T N E S S E T H : - - - - - - - - - - WHEREAS, the Issuer was formed pursuant to a Trust Agreement dated as of August 15, 2003 and is governed by an Amended and Restated Trust Agreement dated as of November 7, 2003 (as amended and supplemented from time to time, the "Trust Agreement"), by and among Hyundai ABS Funding Corporation, as depositor (the "Depositor"), Wilmington Trust Company, not in its individual capacity but solely as owner trustee (the "Owner Trustee"), and Hyundai Motor Finance Company, as administrator (the "Administrator"), and is issuing 1.11% Asset Backed Notes, Class A-1, 1.56% Asset Backed Notes, Class A-2, 2.33% Asset Backed Notes, Class A-3 and 3.02% Asset Backed Notes, Class A-4 (collectively, the "Class A Notes"), 2.99% Asset Backed Notes, Class B (the "Class B Notes"), 3.19% Asset Backed Notes, Class C (the "Class C Notes"), and 4.06% Asset Backed Notes, Class D Notes (the "Class D Notes", and, collectively with the Class A Notes, the Class B Notes and the Class C Notes, the "Notes") pursuant to the Indenture dated as of November 7, 2003 (as amended and supplemented from time to time, the "Indenture"), between the Issuer and the Indenture Trustee, and is issuing asset backed certificates (the "Trust Certificates" and, collectively with the Notes, the "Securities") pursuant to the Trust Agreement (capitalized terms used and not otherwise defined herein shall have the meanings assigned to such terms in the Indenture or the Trust Agreement, as applicable); WHEREAS, the Issuer has entered into certain agreements in connection with the issuance of the Securities, including (i) a Sale and Servicing Agreement dated as of November 7, 2003 (as amended and supplemented from time to time, the "Sale and Servicing Agreement"), among Hyundai Motor Finance Company, as seller (in such capacity, the "Seller") and as servicer (in such capacity the "Servicer"), the Depositor, the Issuer and the Indenture Trustee, (ii) a Letter of Representations dated November 7, 2003 (as amended and supplemented from time to time, the "Depository Agreement"), among the Issuer, the Indenture Trustee, the Administrator and The Depository Trust Company ("DTC") relating to the Notes and (iii) the Indenture (the Sale and Servicing Agreement, the Depository Agreement, the Indenture and the Trust Agreement being referred to hereinafter collectively as the "Related Agreements"); WHEREAS, pursuant to the Related Agreements, the Issuer and Owner Trustee are required to perform certain duties in connection with (a) the Notes and the collateral therefor pledged pursuant to the Indenture (the "Collateral") and (b) the beneficial ownership interests in the Issuer (the registered holders of such interests being referred to herein as the "Owners"); WHEREAS, the Issuer and the Owner Trustee desire to have the Administrator perform certain of the duties of the Issuer and the Owner Trustee referred to in the preceding clause and to provide such additional services consistent with the terms of this Agreement and the Related Agreements as the Issuer and the Owner Trustee may from time to time request; and WHEREAS, the Administrator has the capacity to provide the services required hereby and is willing to perform such services for the Issuer and the Owner Trustee on the terms set forth herein; NOW, THEREFORE, in consideration of the mutual covenants contained herein, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows: Section 1.1 Duties of the Administrator with Respect to the Depository Agreement and the Indenture. The Administrator agrees to perform all its duties as Administrator and all the duties of the Issuer and the Owner Trustee under the Depository Agreement. In addition, the Administrator shall consult with the Owner Trustee regarding the duties of the Issuer or the Owner Trustee under the Indenture and the Depository Agreement. The Administrator shall monitor the performance of the Issuer and shall advise the Owner Trustee when action is necessary to comply with the Issuer's or the Owner Trustee's duties under the Indenture and the Depository Agreement. The Administrator shall prepare for execution by the Issuer, or shall cause the preparation by other appropriate persons of, all such documents, reports, filings, instruments, certificates and opinions that it shall be the duty of the Issuer or the Owner Trustee to prepare, file or deliver pursuant to the Indenture and the Depository Agreement. In furtherance of the foregoing, the Administrator shall take all appropriate action that is the duty of the Issuer or the Owner Trustee to take pursuant to the Indenture including, without limitation, such of the foregoing as are required with respect to the following matters under the Indenture (parenthetical section references are to sections of the Indenture): (A) the duty to cause the Note Register to be kept and to give the Indenture Trustee notice of any appointment of a new Note Registrar and the location, or change in location, of the Note Register (Section 2.04); (B) the notification of Noteholders of the final principal payment on their Notes (Section 2.08(b)); (C) the preparation of or obtaining of the documents and instruments required for authentication of the Notes and delivery of the same to the Indenture Trustee (Section 2.02); (D) the preparation, obtaining or filing of the instruments, opinions and certificates and other documents required for the release of collateral (Section 4.04); (E) the maintenance of an office in the Borough of Manhattan, City of New York, for registration of transfer or exchange of Notes (Section 3.02); (F) the duty to cause newly appointed Paying Agents, if any, to deliver to the Indenture Trustee the instrument specified in the Indenture regarding funds held in trust (Section 3.03); 2 (G) the direction to the Indenture Trustee to deposit moneys with Paying Agents, if any, other than the Indenture Trustee (Section 3.03); (H) the obtaining and preservation of the Issuer's qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of the Indenture, the Notes, the Collateral and each other instrument and agreement included in the Trust Estate (Section 3.04); (I) the preparation of all supplements and amendments to the Indenture and all financing statements, continuation statements, instruments of further assurance and other instruments and the taking of such other action as is necessary or advisable to protect the Trust Estate (Section 3.05); (J) the delivery of the Opinion of Counsel on the Closing Date and the annual delivery of Opinions of Counsel as to the Trust Estate, and the annual delivery of the Officer's Certificate and certain other statements as to compliance with the Indenture (Sections 3.06 and 3.09); (K) the identification to the Indenture Trustee in an Officer's Certificate of a Person with whom the Issuer has contracted to perform its duties under the Indenture (Section 3.07(b)); (L) the delivery of written notice to the Indenture Trustee and the Rating Agencies of a Servicer Default under the Sale and Servicing Agreement and, if such Servicer Default arises from the failure of the Servicer to perform any of its duties under the Sale and Servicing Agreement with respect to the Receivables, the taking of all reasonable steps available to remedy such failure (Section 3.07(d)); (M) the duty to cause the Servicer to comply with Sections 4.09, 4.10, 4.11 and Article VII of the Sale and Servicing Agreement (Section 3.14); (N) the preparation and obtaining of documents and instruments required for the release of the Issuer from its obligations under the Indenture (Section 3.10(b)); (O) the delivery of written notice to the Indenture Trustee and the Rating Agencies of each Event of Default under the Indenture and each default by the Servicer or the Seller under the Sale and Servicing Agreement and by the Seller or the Company under the Receivables Purchase Agreement (Section 3.19); (P) the monitoring of the Issuer's obligations as to the satisfaction and discharge of the Indenture and the preparation and execution of an Officer's Certificate and the obtaining of the Opinion of Counsel and the Independent Certificate relating thereto (Section 4.01); (Q) the compliance with any written directive of the Indenture Trustee with respect to the sale of the Trust Estate in a commercially reasonable manner if an Event of Default shall have occurred and be continuing (Section 5.04); 3 (R) the preparation and delivery of notice to Noteholders of the removal of the Indenture Trustee and the appointment of a successor Indenture Trustee (Section 6.08); (S) the preparation of any written instruments required to confirm more fully the authority of any co-trustee or separate trustee and any written instruments necessary in connection with the resignation or removal of any co-trustee or separate trustee (Sections 6.08 and 6.10); (T) the furnishing to the Indenture Trustee with the names and addresses of Noteholders during any period when the Indenture Trustee is not the Note Registrar (Section 7.01); (U) provide reasonable and appropriate assistance to the Depositor or its designees, as applicable, with the preparation and filing with the Commission, any applicable state agencies and the Indenture Trustee of documents required to be filed on a periodic basis with, and summaries thereof as may be required by rules and regulations prescribed by, the Commission and any applicable state agencies and the transmission of such summaries, as necessary, to the Noteholders (Section 7.03); (V) the opening of one or more accounts in the Issuer's name, the preparation and delivery of Issuer Orders, Officer's Certificates and Opinions of Counsel and all other actions necessary with respect to investment and reinvestment of funds in the Trust Accounts (Sections 8.02 and 8.03); (W) the preparation of an Issuer Request and Officer's Certificate and the obtaining of an Opinion of Counsel and Independent Certificates, if necessary, for the release of the Trust Estate (Sections 8.04 and 8.05); (X) the preparation of Issuer Orders and the obtaining of Opinions of Counsel with respect to the execution of supplemental indentures and the mailing to the Noteholders of notices with respect to such supplemental indentures (Sections 9.01, 9.02 and 9.03); (Y) the execution and delivery of new Notes conforming to any supplemental indenture (Section 9.05); (Z) the duty to notify Noteholders of redemption of the Notes or to cause the Indenture Trustee to provide such notification (Section 10.02); (AA) the preparation and delivery of all Officer's Certificates, Opinions of Counsel and Independent Certificates with respect to any requests by the Issuer to the Indenture Trustee to take any action under the Indenture (Section 11.01(a)); (BB) the preparation and delivery of Officer's Certificates and the obtaining of Independent Certificates, if necessary, for the release of property from the lien of the Indenture (Section 11.01(b)); 4 (CC) the notification of the Rating Agencies, upon the failure of the Indenture Trustee to give such notification, of the information required pursuant to Section 11.04 of the Indenture (Section 11.04); (DD) the preparation and delivery to Noteholders and the Indenture Trustee of any agreements with respect to alternate payment and notice provisions (Section 11.06); (EE) the recording of the Indenture, if applicable (Section 11.14); (FF) the preparation of Definitive Notes in accordance with the instructions of the Clearing Agency (Section 2.12); (GG) the direction to Paying Agents to pay to the Indenture Trustee all sums held in trust by such Paying Agents (Section 3.03); and (HH) provide the Indenture Trustee with the information necessary to deliver to each Noteholder such information as may be reasonably required to enable such Holder to prepare its United States federal and state and local income or franchise tax returns (Section 6.06). Section 1.2 Additional Duties. (i) In addition to the duties of the Administrator set forth above, the Administrator shall perform such calculations and shall prepare or shall cause the preparation by other appropriate persons of, and shall execute on behalf of the Issuer or the Owner Trustee, all such documents, reports, filings, instruments, certificates and opinions that it shall be the duty of the Issuer or the Owner Trustee to prepare, file or deliver pursuant to the Related Agreements or Section 5.04(a), (b), (c) or (d) of the Trust Agreement, and at the request of the Owner Trustee shall take all appropriate action that it is the duty of the Issuer or the Owner Trustee to take pursuant to the Related Agreements. In furtherance thereof, the Owner Trustee shall, on behalf of itself and of the Issuer, execute and deliver to the Administrator and to each successor Administrator appointed pursuant to the terms hereof, one or more powers of attorney substantially in the form of Exhibit A hereto, appointing the Administrator the attorney-in-fact of the Owner Trustee and the Issuer for the purpose of executing on behalf of the Owner Trustee and the Issuer all such documents, reports, filings, instruments, certificates and opinions. Subject to Section 5 of this Agreement, and in accordance with the directions of the Owner Trustee, the Administrator shall administer, perform or supervise the performance of such other activities in connection with the Collateral (including the Related Agreements) as are not covered by any of the foregoing provisions and as are expressly requested by the Owner Trustee and are reasonably within the capability of the Administrator. Such responsibilities shall include providing to the Depositor and the Indenture Trustee the monthly servicing report in an appropriate electronic form. (ii) Notwithstanding anything in this Agreement or the Related Agreements to the contrary, the Administrator shall be responsible for performance of the duties of the Owner Trustee set forth in Section 5.04(a), (b), (c) and (d), the penultimate sentence of Section 5.04 and Section 5.05(a) of the Trust Agreement with respect to, among other things, accounting and reports to Owners; provided, however, that the Owner Trustee shall retain 5 responsibility for the distribution of the Schedule K-1s (as prepared by the Administrator) necessary to enable each Owner to prepare its federal and state income tax returns. (iii) The Administrator shall satisfy its obligations with respect to clause (ii) above by retaining, at the expense of the Trust payable by the Administrator, a firm of independent public accountants (the "Accountants") acceptable to the Owner Trustee, which shall perform the obligations of the Administrator thereunder. (iv) The Administrator shall perform the duties of the Administrator including, without limitation, those specified in Sections 8.01, 8.02 and 10.02 of the Trust Agreement required to be performed in connection with the fees, expenses and indemnification and the resignation or removal of the Owner Trustee, and any other duties expressly required to be performed by the Administrator under the Trust Agreement. (v) In carrying out the foregoing duties or any of its other obligations under this Agreement, the Administrator may enter into transactions or otherwise deal with any of its affiliates; provided, however, that the terms of any such transactions or dealings shall be in accordance with any directions received from the Issuer and shall be, in the Administrator's opinion, no less favorable to the Issuer than would be available from unaffiliated parties. Section 1.3 Non-Ministerial Matters. With respect to matters that in the reasonable judgment of the Administrator are non-ministerial, the Administrator shall not take any action unless within a reasonable time before the taking of such action, the Administrator shall have notified the Owner Trustee of the proposed action and the Owner Trustee shall have withheld consent or provided an alternative direction. Unless explicitly provided under this Administration Agreement, for the purpose of the preceding sentence, "non-ministerial matters" shall include, without limitation: (A) the amendment of or any supplement to the Indenture; (B) the initiation of any claim or lawsuit by the Issuer and the compromise of any action, claim or lawsuit brought by or against the Issuer (other than in connection with the collection of the Receivables). (C) the amendment, change or modification of the Related Agreements; (D) the appointment of successor Note Registrars, successor Paying Agents and successor Indenture Trustees pursuant to the Indenture or the appointment of successor Administrators or Successor Servicers, or the consent to the assignment by the Note Registrar, Paying Agent or Indenture Trustee of its obligations under the Indenture; and (E) the removal of the Indenture Trustee. Notwithstanding anything to the contrary in this Agreement, the Administrator shall not be obligated to, and shall not, (x) make any payments to the Noteholders under the Related Agreements, (y) sell the Trust Estate pursuant to Section 5.04 of the Indenture or (z) take any other action that the Issuer directs the Administrator not to take on its behalf. 6 Section 2. Records. The Administrator shall maintain appropriate books of account and records relating to services performed hereunder, which books of account and records shall be accessible for inspection by the Issuer at any time during normal business hours. Section 3. Compensation. As compensation for the performance of the Administrator's obligations under this Agreement and as reimbursement for its expenses related thereto, the Administrator shall be paid by the Servicer as set forth in Schedule C to the Sale and Servicing Agreement. Section 4. Additional Information To Be Furnished to the Issuer. The Administrator shall furnish to the Issuer from time to time such additional information regarding the Collateral as the Issuer shall reasonably request. Section 5. Independence of the Administrator. For all purposes of this Agreement, the Administrator shall be an independent contractor and shall not be subject to the supervision of the Issuer or the Owner Trustee with respect to the manner in which it accomplishes the performance of its obligations hereunder. Unless expressly authorized by the Issuer, the Administrator shall have no authority to act for or represent the Issuer or the Owner Trustee in any way and shall not otherwise be deemed an agent of the Issuer or the Owner Trustee. Section 6. No Joint Venture. Nothing contained in this Agreement (i) shall constitute the Administrator and either of the Issuer or the Owner Trustee as members of any partnership, joint venture, association, syndicate, unincorporated business or other separate entity, (ii) shall be construed to impose any liability as such on any of them or (iii) shall be deemed to confer on any of them any express, implied or apparent authority to incur any obligation or liability on behalf of the others. Section 7. Other Activities of Administrator. Nothing herein shall prevent the Administrator or its Affiliates from engaging in other businesses or, in its sole discretion, from acting in a similar capacity as an administrator for any other person or entity even though such person or entity may engage in business activities similar to those of the Issuer, the Owner Trustee or the Indenture Trustee. The Administrator and its affiliates may generally engage in any kind of business with any person party to a Related Agreement, any of its affiliates and any person who may do business with or own securities of any such person or any of its affiliates, without any duty to account therefor to the Issuer, the Owner Trustee or the Indenture Trustee. Section 8. Term of Agreement; Resignation and Removal of Administrator. (a) This Agreement shall continue in force until the dissolution of the Issuer, upon which event this Agreement shall automatically terminate. (b) Subject to Sections 8(e) and (f), the Administrator may resign its duties hereunder by providing the Issuer with at least 60 days' prior written notice. 7 (c) Subject to Sections 8(e) and (f), the Issuer may remove the Administrator without cause by providing the Administrator with at least 60 days' prior written notice. (d) Subject to Sections 8(e) and (f), at the sole option of the Issuer, the Administrator may be removed immediately upon written notice of termination from the Issuer to the Administrator if any of the following events shall occur: (i) the Administrator shall default in the performance of any of its duties under this Agreement and, after notice of such default, shall not cure such default within ten Business Days (or, if such default cannot be cured in such time, shall not give within ten days such assurance of cure as shall be reasonably satisfactory to the Issuer); (ii) a court having jurisdiction in the premises shall enter a decree or order for relief, and such decree or order shall not have been vacated within 60 days, in respect of the Administrator in any involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect or appoint a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for the Administrator or any substantial part of its property or order the winding-up or liquidation of its affairs; or (iii) the Administrator shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, shall consent to the entry of an order for relief in an involuntary case under any such law, shall consent to the appointment of a receiver, liquidator, assignee, trustee, custodian, sequestrator or similar official for the Administrator or any substantial part of its property, shall consent to the taking of possession by any such official of any substantial part of its property, shall make any general assignment for the benefit of creditors or shall fail generally to pay its debts as they become due. The Administrator agrees that if any of the events specified in clauses (ii) or (iii) of this Section shall occur, it shall give written notice thereof to the Issuer and the Indenture Trustee within seven days after the happening of such event. (e) No resignation or removal of the Administrator pursuant to this Section shall be effective until (i) a successor Administrator shall have been appointed by the Issuer, (ii) such successor Administrator shall have agreed in writing to be bound by the terms of this Agreement in the same manner as the Administrator is bound hereunder and (iii) the Owner Trustee and the Indenture Trustee consent to the successor Administrator. (f) The appointment of any successor Administrator shall be effective only after receipt of written confirmation from each Rating Agency that the proposed appointment will not result in the qualification, downgrading or withdrawal of any rating assigned to the Notes by such Rating Agency. (g) A successor Administrator shall execute, acknowledge and deliver a written acceptance of its appointment hereunder to the resigning Administrator and to the Issuer. Thereupon the resignation or removal of the resigning Administrator shall become effective, and the successor Administrator shall have all the rights, powers and duties of the Administrator under this Agreement. The successor Administrator shall mail a notice of its succession to the Noteholders and the Certificateholders. The resigning Administrator shall promptly transfer or 8 cause to be transferred all property and any related agreements, documents and statements held by it as Administrator to the successor Administrator and the resigning Administrator shall execute and deliver such instruments and do other things as may reasonably be required for fully and certainly vesting in the successor Administrator all rights, power, duties and obligations hereunder. (h) In no event shall a resigning Administrator be liable for the acts or omissions of any successor Administrator hereunder. (i) In the exercise or administration of its duties hereunder and under the Related Documents, the Administrator may act directly or through its agents or attorneys pursuant to agreements entered into with any of them, and the Administrator shall not be liable for the conduct or misconduct of such agents or attorneys if such agents or attorneys shall have been selected by the Administrator with due care. Section 9. Action upon Termination, Resignation or Removal. Promptly upon the effective date of termination of this Agreement pursuant to Section 8(a) or the resignation or removal of the Administrator pursuant to Section 8(b) or (c), respectively, the Administrator shall be entitled to be paid all fees and reimbursable expenses accruing to it to the date of such termination, resignation or removal. The Administrator shall forthwith upon such termination pursuant to Section 8(a) deliver to the Issuer all property and documents of or relating to the Collateral then in the custody of the Administrator. In the event of the resignation or removal of the Administrator pursuant to Section 8(b) or (c), respectively, the Administrator shall cooperate with the Issuer and take all reasonable steps requested to assist the Issuer in making an orderly transfer of the duties of the Administrator. Section 10. Notices. Any notice, report or other communication given hereunder shall be in writing and addressed as follows: (i) if to the Issuer or the Owner Trustee, to: Hyundai Auto Receivables Trust 2003-A In care of Wilmington Trust Company Rodney Square North 1100 North Market Street Wilmington, Delaware 19890 Attention: Corporate Trust Administration 9 (ii) if to the Administrator, to: Hyundai Motor Finance Company 10550 Talbert Avenue Fountain Valley, CA 92708 Attention: Vice President, Finance with a copy to the General Counsel (iii) if to the Indenture Trustee, to: Wells Fargo Bank Minnesota, National Association Sixth and Marquette Avenue, MAC N9311-161 Minneapolis, MN 55479 Attention: CTS/Asset Backed Securities or to such other address as any party shall have provided to the other parties in writing. Any notice required to be in writing hereunder shall be deemed given if such notice is mailed by certified mail, postage prepaid, or hand-delivered to the address of such party as provided above. Section 11. Amendments. This Agreement may be amended from time to time by a written amendment duly executed and delivered by the Issuer, the Administrator and the Indenture Trustee, with the written consent of the Owner Trustee, without the consent of the Noteholders and the Certificateholders, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement; provided that (i) such amendment will not materially and adversely affect the interest of any Noteholder or Certificateholder as confirmed by an opinion of counsel provided to the Indenture Trustee and (ii) the Administrator shall have delivered to the Owner Trustee and the Indenture Trustee, an Opinion of Counsel stating that, in the opinion of such counsel, either (A) all financing statements and continuation statements have been filed that are necessary to fully preserve and protect the interest of the Owner Trustee and the Indenture Trustee in the Receivables, and reciting the details of such filings or referring to prior Opinions of Counsel in which such details are given, or (B) no such action shall be necessary to preserve and protect such interest. This Agreement may also be amended by the Issuer, the Administrator and the Indenture Trustee with the written consent of the Owner Trustee and the holders of Notes evidencing at least a majority of the Outstanding Amount of the Controlling Class and the holders of Trust Certificates evidencing at least a majority of the Certificate Percentage Interests for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of modifying in any manner the rights of Noteholders or the Certificateholders; provided, however, that no such amendment may (i) increase or reduce in any manner the amount of, or accelerate or delay the timing of, collections of payments on Receivables or distributions that are required to be made for the benefit of the Noteholders or Certificateholders or (ii) reduce the aforesaid percentage of the holders of Notes and Trust Certificates which are required to consent to any such amendment, without the consent of the holders of all the outstanding Notes and Trust Certificates. Notwithstanding the foregoing, the Administrator may not amend this Agreement without the permission of the Seller, which permission shall not be unreasonably withheld. 10 Section 12. Successors and Assigns. This Agreement may not be assigned by the Administrator unless such assignment is previously consented to in writing by the Issuer and the Owner Trustee and subject to the satisfaction of the Rating Agency Condition in respect thereof. An assignment with such consent and satisfaction, if accepted by the assignee, shall bind the assignee hereunder in the same manner as the Administrator is bound hereunder. Notwithstanding the foregoing, this Agreement may be assigned by the Administrator without the consent of the Issuer or the Owner Trustee to a corporation or other organization that is a successor (by merger, consolidation or purchase of assets) to the Administrator; provided that such successor organization executes and delivers to the Issuer, the Owner Trustee and the Indenture Trustee an agreement in which such corporation or other organization agrees to be bound hereunder by the terms of said assignment in the same manner as the Administrator is bound hereunder and represents that it has the financial ability to satisfy its indemnification obligations hereunder. Notwithstanding the foregoing, the Administrator can transfer its obligations to any affiliate that succeeds to substantially all of the assets and liabilities of the Administrator and who has represented and warranted that it is not less creditworthy than the Administrator. Subject to the foregoing, this Agreement shall bind any successors or assigns of the parties hereto. Section 13. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. Section 14. Headings. The section headings hereof have been inserted for convenience of reference only and shall not be construed to affect the meaning, construction or effect of this Agreement. Section 15. Counterparts. This Agreement may be executed in counterparts, each of which when so executed shall be an original, but all of which together shall constitute but one and the same agreement. Section 16. Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Section 17. Not Applicable to Wells Fargo Bank Minnesota, National Association in Other Capacities. Nothing in this Agreement shall affect any obligation Wells Fargo Bank Minnesota, National Association may have in any other capacity. Section 18. Limitation of Liability of Owner Trustee and Indenture Trustee. (a) Notwithstanding anything contained herein to the contrary, this instrument has been executed by the Owner Trustee solely in its capacity as Owner Trustee and in no event shall the Owner Trustee in its individual capacity or any beneficial owner of the Issuer have any 11 liability for the representations, warranties, covenants, agreements or other obligations of the Issuer hereunder, as to all of which recourse shall be had solely to the assets of the Issuer. For all purposes of this Agreement, in the performance of any duties or obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of Articles VI, VII and VIII of the Trust Agreement. (b) Notwithstanding anything contained herein to the contrary, this Agreement has been countersigned by the Indenture Trustee solely as Indenture Trustee and in no event shall the Indenture Trustee have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer hereunder or in any of the certificates, notices or agreements delivered pursuant hereto, as to all of which recourse shall be had solely to the assets of the Issuer. (c) No recourse under any obligation, covenant or agreement of the Issuer contained in this Agreement shall be had against any agent of the Issuer (including the Administrator and the Owner Trustee) as such by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute or otherwise; it being expressly agreed and understood that this Agreement is solely an obligation of the Issuer as a Delaware statutory trust, and that no personal liability whatever shall attach to or be incurred by any agent of the Issuer (including the Administrator and the Owner Trustee), as such, under or by reason of any of the obligations, covenants or agreements of the Issuer contained in this Agreement, or implied therefrom, and that any and all personal liability for breaches by the Issuer of any such obligations, covenants or agreements, either at common law or at equity, or by statute or constitution, of every such agent is hereby expressly waived as a condition of and in consideration for the execution of this Agreement. Section 19. Third-Party Beneficiary. The Seller, the Depositor and the Owner Trustee are third-party beneficiaries to this Agreement and are entitled to the rights and benefits hereunder and may enforce the provisions hereof as if each were a party hereto. Section 20. Nonpetition Covenants. Notwithstanding any prior termination of this Agreement, the Administrator and the Indenture Trustee shall not, prior to the date which is one year and one day after the termination of this Agreement with respect to the Issuer, acquiesce, petition or otherwise invoke or cause the Issuer to invoke the process of any court of government authority for the purpose of commencing or sustaining a case against the Issuer under any Federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Issuer. Section 21. Liability of Administrator. Notwithstanding any provision of this Agreement, the Administrator shall not have any obligations under this Agreement other than those specifically set forth herein, and no implied obligations of the Administrator shall be read into this Agreement. Neither the Administrator nor any of its directors, officers, agents or employees shall be liable for any action taken or omitted to be taken in good faith by it or them under or in connection with this Agreement, except for its or their own gross negligence or willful misconduct and in no event shall the Administrator be liable under or in connection with this Agreement for indirect, special or consequential losses or damages of any kind, including lost 12 profits, even if advised of the possibility thereof and regardless of the form of action by which such losses or damages may be claimed. Without limiting the foregoing, the Administrator may (a) consult with legal counsel (including counsel for the Issuer), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts and (b) shall incur no liability under or in respect of this Agreement by acting upon any notice (including notice by telephone), consent, certificate or other instrument or writing (which may be by facsimile) believed by it to be genuine and signed or sent by the proper party or parties. 13 EXECUTION COPY IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the day and year first above written. HYUNDAI AUTO RECEIVABLES TRUST 2003-A By: WILMINGTON TRUST COMPANY, not in its individual capacity but solely as Owner Trustee By: W. Chris Sponenberg -------------------------------- Name: W. Chris Sponenberg Title: Vice President WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, not in its individual capacity but solely as Indenture Trustee By: /s/ Marianna C. Stershic ------------------------------------ Name: Marianna C. Stershic Title: Vice President HYUNDAI MOTOR FINANCE COMPANY, as Administrator By: /s/ David A. Hoeller ------------------------------------ Name: David A. Hoeller Title: Vice President, Finance EXECUTION COPY EXHIBIT A POWER OF ATTORNEY STATE OF DELAWARE ) ) COUNTY OF DELAWARE ) KNOW ALL MEN BY THESE PRESENTS, that Hyundai Auto Receivables Trust 2003-A (the "Issuer"), does hereby make, constitute and appoint Hyundai Motor Finance Company, as administrator (the "Administrator") under the Owner Trust Administration Agreement dated November 7, 2003 (the "Administration Agreement"), among the Issuer, the Administrator, the Owner Trustee, and Wells Fargo Bank Minnesota, National Association, as Indenture Trustee, as the same may be amended from time to time, and its agents and attorneys, as Attorneys-in-Fact to execute on behalf of the Owner Trustee or the Issuer all such documents, reports, filings, instruments, certificates and opinions as it should be the duty of the Owner Trustee or the Issuer to prepare, file or deliver pursuant to the Basic Documents, or pursuant to Section 5.04(a), (b), (c) or (d) of the Trust Agreement, including, without limitation, to appear for and represent the Owner Trustee and the Issuer in connection with the preparation, filing and audit of federal, state and local tax returns pertaining to the Issuer, and with full power to perform any and all acts associated with such returns and audits that the Owner Trustee could perform, including without limitation, the right to distribute and receive confidential information, defend and assert positions in response to audits, initiate and defend litigation, and to execute waivers of restrictions on assessments of deficiencies, consents to the extension of any statutory or regulatory time limit, and settlements. All powers of attorney for this purpose heretofore filed or executed by the Owner Trustee are hereby revoked. Capitalized terms that are used and not otherwise defined herein shall have the meanings ascribed thereto in the Administration Agreement. EXECUTED this 7th day of November, 2003. HYUNDAI AUTO RECEIVABLES TRUST 2003-A By: WILMINGTON TRUST COMPANY, not in its individual capacity but solely as Owner Trustee By: -------------------------------- Name: Title: STATE OF DELAWARE ) ) COUNTY OF DELAWARE ) Before me, the undersigned authority, on this day personally appeared _______________________, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that s/he signed the same for the purposes and considerations therein expressed. Sworn to before me this __ day of November, 2003. Notary Public - State of _________________ -----END PRIVACY-ENHANCED MESSAGE-----